Value added tax on the transfer of operating equipment

The European Court of Justice must decide in which cases the obligation to pay VAT on the rental of permanently installed operating equipment applies.

While the rental of buildings is exempt from VAT if the landlord does not opt for VAT in the case of a commercial rental, the rental of machinery and other operating equipment is subject to VAT. The situation becomes difficult if no use is made of the VAT option and permanently installed operating equipment is not rented out separately but together with the building. The Federal Fiscal Court has therefore referred the question to the European Court of Justice as to whether the obligation to pay VAT on the rental of permanently installed fixtures and machinery only applies in cases where these are rented out separately in a separate contract, or whether it also covers cases in which the rental of the machinery is part of the VAT-exempt rental of the building and should therefore actually be tax-exempt as an ancillary service to the latter.