Transfer of business as a whole?
October 4, 2011 | 30,00 EUR | answered by Dr. Yanqiong Bolik
A gastronomist sells his restaurant to take over a new one. The old business is deregistered. The new restaurant is provided free of charge, with the buyer taking over the renovation and furnishing of the premises. However, instead of opening the new restaurant, he immediately sells it after renovation. A new business registration has not been completed. Is this also a transfer of a business as a whole? Is VAT payable on this transaction or not? The new buyer does not want to pay the 19% VAT, as his tax advisor claims that the tax office would deny the input tax deduction (due to the transfer of business as a whole). However, if the seller has already paid the VAT, can the tax office deny the input tax deduction to the buyer? Where can I find this information?
Dear inquirer,
Thank you for your inquiry, which I will gladly answer taking into consideration your input and the rules of this platform.
Please note that my explanation is based on the facts presented, and that adding, omitting, altering the information, or the ambiguity of the information can change the tax result.
The transfer of a business as a whole is regulated in § 1 Abs. 1a UStG. According to this, turnover within the scope of a transfer of a business to another entrepreneur for his business is not subject to value added tax.
Requirements for the transfer of a business as a whole include: the transfer of a business or a separately conducted operation to another entrepreneur for his business. The acquisition must intend to continue the operation. Subject to a review of complete information, it seems that the planned transfer by you corresponds to a transfer of a business as a whole. However, a definitive statement can only be made after the necessary examination. If you would like to have the situation reviewed in detail, I am happy to assist for an additional fee.
As a transfer of a business as a whole is not subject to value added tax, the seller should issue an invoice with a net amount. Therefore, no value added tax is payable on this turnover for the seller. The buyer also has no right to deduct input tax.
I hope I was able to help you.
If there are still any uncertainties, please feel free to use the follow-up function.
Best regards,
Dr. Yanqiong Bolik
Tax advisor
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 9332 2657
Email: info@zdbz.de
www.steuerberatung.zdbz.de
