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Limited Scope for Land Sale Tax Break, EU Court Adviser Says

May 20, 2021, 1:41 PM

A provision in the EU’s value-added-tax rules on sales of building land should be interpreted very narrowly, an adviser to the bloc’s top court said in an opinion Thursday.

Article 392 of the EU VAT Directive (2006/112/EC) permits reduced tax when a purchaser of building land who intends to resell it pays VAT on the original purchase and can’t reclaim it. In such a case, the VAT charge on the resale can be based on the difference between the purchase and resale prices, rather than the whole price, according to the directive.

But the provision doesn’t apply if the original ...