Legal effects in the Value Added Tax of the transformation of perpetual usufruct into ownership in the light of the judgment of the CJEU of 25 February 2021, Municipality of Wrocław against the Director of KIS, C-604/19
Abstract
On 5 October 2018, the Act of 20 July 2018 on the transformation of the right of perpetual usufruct of land developed for housing purposes into the ownership right to this land entered into force. Pursuant to the Act, as of 1 January 2019, the commune and other entities ceased to be the owners of land developed for residential purposes, which remained in perpetual usufruct, and the existing perpetual usufructuaries became, by operation of law, the owners of the land in question. Due to the transformation, the new property owners were obliged to pay the so-called “conversion fee”, payable by 31 March of each year for a period of 20 years from the date of conversion or as a specific one-off fee. In view of the amended legal regulation, a fundamental question. arose whether the conversion of the right of perpetual usufruct into the right of ownership of real estate by operation of law, such as in the circumstances of the case at hand, constitutes a supply of goods within the meaning of Article 14 (2) (a) in conjunction with Article 2 (1) (a) of Directive 2006/112/WE.
Keywords:
VAT, tax on goods and services, transformation fee, annual perpetual usufruct fee, property right, CJEU, question for a preliminary rulingReferences
Sanakiewicz Ł., Przekształcenie prawa użytkowania wieczystego gruntów zabudowanych na cele mieszkaniowe w prawo własności tych gruntów. Komentarz, 2019 [wyd. el. LEX].
University in Wrocław https://orcid.org/0000-0003-1955-5949
License
This work is licensed under a Creative Commons Attribution 4.0 International License.
The Author declares that the Work is original and does not infringe any personal or proprietary rights of third parties, and that She/He has unlimited rights to the Work which are the subject of the Agreement signed with the Publisher.
Author of the publication transfers to the Publisher the economic copyrights to the Work (article) submitted for publication, free of charge, without time and territorial restrictions in the following fields of use:
a) production, recording and reproduction of the copies of the Work by a specific technique, including printing, magnetic recording and digital technology;
b) marketing, lending or rental of the original or copies of the Work, and distribution in the form of open access, in accordance with the license Creative Commons Attribution 4.0 International (also known as CC BY), available at: https://creativecommons.org/licenses/by/4.0/legalcode.pl;
c) inclusing the Work in the composition of the collective work;
d) publishing on the website of the journal, public performance, exhibition, display, reproduction, broadcasting and rebroadcasting, and making the Work available to the public in such a way that everyone can have access to them in a place and at a time chosen by them;
e) uploading the Work in an electronic form to electronic platforms or other uploading of the Work in an electronic form to the Internet or other network.
The proprietary copyright to the Work is transferred to the Publisher free of charge upon signing the contract wit the Publisher.
