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Tax Victory for Foreign Property Owners in Top EU Court (1)

June 3, 2021, 2:57 PMUpdated: June 4, 2021, 5:03 PM

The European Union’s top court dealt a blow to Austria’s tax system Thursday, ruling that property alone cannot constitute the fixed establishment of its overseas owner for value-added tax purposes.

The verdict confirms that despite technology’s growing sophistication and the prevalence of remote working, non-EU businesses with activities in the bloc are not liable to charge VAT if they have no local staff.

EU law states that a fixed establishment—which determines the place of supply—is a permanent, physical location with sufficient personnel and technical resources to supply goods and services.

However, the Austrian tax authority’s guidelines state that leased properties ...