VAT

The decision to sell a business is one of the most important steps for an entrepreneur. This process involves not only legal and business aspects, but also tax obligations. It is advisable to find out in advance what taxes apply when selling a business, in order to prepare well for the transaction and avoid unpleasant surprises. In this article we explain what taxes apply when selling a business and what the amount depends on.

The opinion in question was issued on April 25, 2024 in Case C-60/23 Skatteverket v. Digital Charging Solutions GmbH (DSC). DSC is in the business of providing electric vehicle users with access to a network of charging points operated by operators with whom DSC has entered into separate agreements. DCS provides EV users with a card and an authentication application to charge their vehicles at these points. Based on invoices received from the said operators, DCS invoices users monthly for the amount of electricity supplied to them. DCS also charges its customers a monthly fixed fee for access to the application, regardless of whether the user actually purchased electricity during the period.

The movement of the taxpayer’s own goods (belonging to the enterprise) from the territory of Poland to the territory of another EU member state shall be considered an intra-Community supply of goods (hereinafter: “WDT”). The above-mentioned own goods shall be understood as such goods which have been manufactured, extracted, purchased, including as part of intra-Community acquisition of goods, by a taxpayer in the territory of Poland within the framework of his business activity, or imported into the territory of Poland as part of importation of goods, if they are to serve the business activity of the taxpayer

In order to increase sales, taxpayers choose to conduct various promotional activities. One example of conducting such activities is selling goods in sets. The benefit on the buyer’s side is that the price he pays for the goods purchased in a set is lower than what he would have had to pay if he had decided to buy the goods separately. This means that the seller has to reduce the price of the goods included in the set. When the goods are subject to taxation at different rates, particularly the basic and preferential rates, the manner in which such a reduction is made can have significant consequences on VAT grounds.

Individual Interpretation by the Director of the National Tax Information Agency dated April 26, 2024, Ref. No. 0112-KDIL3.4012.174.2024.1.AK A VAT taxpayer operating a sole proprietorship in the rental and leasing of real estate (both buildings and premises) applied for an interpretation. The factual state indicated that the majority of the taxpayer’s activities were subject to VAT, with a limited scope of VAT exemption for properties rented for residential purposes.

In the individual interpretation of 23 April 2024, 0112-KDIL1-2.4012.16.2024.2.DS, the Director of the National Revenue Information (KIS) assessed the possibility of applying a VAT exemption for the rental of rooms such as storage units, compartments, and cellars by a cooperative. According to the description in the application for interpretation, these rooms are used by residents of residential buildings managed by the cooperative mainly for storing bicycles, strollers, preserves, etc.

Spaces within shopping centers where devices (amusement machines) intended for children are installed do not constitute “amusement parks,” and thus the purchase of tokens allowing access to these devices does not qualify as an entry fee to such a park. Consequently, in this situation, there is no basis for applying the reduced VAT rate (CJEU Order of 14 March 2024, C-576/23, Elite Games SRL).

The case in question involved a natural person – a farmer, registered as an active VAT taxpayer, engaged in milk production. This taxpayer was acquiring land plots for the purpose of expanding his farm, with the acquisition not subject to VAT.