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Luxembourg (dpa) - If a homeowners association operates a block-type thermal power station and supplies its members with heat, VAT is due according to a ruling by the European Court of Justice (ECJ).
The European VAT Directive contradicts the exceptions of the German VAT law, the ECJ announced on Thursday in Luxembourg (Ref .: C-449/19).
Specifically, it was about a case from Baden: The tax office in Villingen-Schwenningen had refused the homeowners association (WEG) Tevesstrasse to deduct input tax.
The WEG wanted to take action against this at the Baden-Württemberg Finance Court.
This in turn asked the ECJ for an interpretation of the VAT Directive.
The judges ruled that the VAT Directive applied in the present case and that the supply of heat was in principle subject to VAT.
It is crucial that a fee is paid for the delivery - regardless of whether the whole thing is geared towards profit.
Furthermore, although the directive allows member states to exempt the rental and leasing of land from tax, this does not apply to the supply of heat through a WEG to owners who are members of this community.
But this is what the German sales tax law provides.
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The judgment of the ECJ only relates to the question of how Union law is interpreted.
"The Court of Justice does not rule on the national legal dispute," said the ECJ.
In this case, the Baden-Württemberg Finance Court has jurisdiction, but it has to decide "in accordance with the decision of the Court of Justice".
Communication from the ECJ
About the case
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VAT Directive
Sales tax law, paragraph 4 (specifically paragraph 13)