If all the conditions set out in paragraphs 1.4 and 2.2 are met, the togc rules apply and VAT cannot be collected or accounted for on the assets transferred (except in certain circumstances) to the premises. B, for example the land or land used in the company. Details of the circumstances under which you must collect VAT on the premises are shown in paragraph 2.3. The consequences of transferring a VAT identification number are legally binding for both parties and involve the transfer of a possible VAT obligation to the buyer. The buyer is responsible for the outstanding VAT from the seller`s registration, including VAT on the shares and assets held by the seller. However, the seller is no longer entitled to unclaimed upstream VAT or VAT refunds, either before or after the transfer. This section deals with the specific rules applicable to the sale of a business, so that the transfer of part or all of the assets should be considered a TOGC and not a taxable benefit. Section 6 provides examples of circumstances related to the transfer of land or land in which the transfer of a „real estate rental“ business can be considered a „common concern.“ In cases where such a transfer has taken place, the conditions set out in paragraphs 2.2 and 2.3 still need to be met for a TOGC to be available and the delivery of assets to VAT to be ignored. There should not be a number of immediately successive transmissions from the company. If A sells its assets to B, which immediately sells these assets to C because B did not exercise the transaction, toGC`s provisions do not apply to any of the transactions. This means that sales cover their normal VAT liabilities (taxable or exempt). If the buyer uses the assets for deliveries directly outside the VAT group, it would also be a TOGC.
But if you cancel your registration and you have all the goods on which you have applied for VAT upstream and which are not transferred with the company, you normally have to account for VAT on those assets. Paragraphs 2.3 and 2.4 of the VAT 700/11 communication: the cancellation of your registration will tell you more. If you are a member of a partially exempt VAT group and you acquire commercial assets under a TOGC, you must target them as delivered to the Group and process them by the Group. This means that self-sufficiency is triggered. Where there are liabilities that the purchaser does not collect in the purchase, the parties must ensure that the purchase is not less than the fair value of the assets and that the entity remains sufficiently capitalized after the sale to settle its debts and liabilities. Otherwise, the transaction may be considered fraudulent. The activity must continue and should not be satisfied with the acquisition of assets for liquidation or immediate disposal. However, if the assets are to be used both in tax and tax-exempt, upstream VAT is a residual upstream vat and must be distributed according to the method of partial exemption from the buyer`s VAT. If the buyer does not subsubscrib in either of these two measures, the transfer of the property is outside the provisions of TOGC and the delivery is subject to VAT. However, the transfer of other assets may continue to be treated as TOGC. Purchasing assets allows buyers to divide the purchase price between the assets to reflect their market value.
This increases depreciation deductions that result in future tax savings. Normally, the sale of the assets of a company subject to VAT or a business that must be subject to VAT is subject to VAT at the corresponding rate. But if you sell assets as part of a business that is a business in progress, there is no delivery for VAT purposes under certain conditions and there is no VAT.