Sale and lease back (SLB) transactions of buildings may have adverse VAT consequences as they may trigger an adjustment of the input VAT deduction in relation to the construction or acquisition of the building.
In the Mydibel case the Court of Justice of the EU has now ruled that under certain circumstances such a VAT adjustment is not required. This offers new opportunities to enter into SLB transactions, but it also raises questions as to the impact of this decision on similar cases and SLB arrangements with different characteristics. In this case law note, the authors analyse the consequences and boundaries of this new decision.
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This article was co-written by Wim Panis and Charlène A. Herbain.
Reprinted from Intertax, Volume no. 47, issue 8 & 9, 784 - 788, with permission of Kluwer Law International.