Study on the application of Value Added Tax to the property sector

Immovable property transactions are in most Member States based on concepts employed in the national (civil) laws. The application of the origin principle causes (additional) difficulties because of the different concepts employed in the national laws. In order to achieve a more uniform approach, we prefer to draft legislation by means of regulations instead of directives. Moreover, inequalities between Member States will be reduced if terms used in the regulations are defined precisely. With regard to immovable property transactions this means that terms as immovable property, accommodation in the hotel sector, permanently installed equipment, right in rem, lease, etc. may not longer be interpreted from a Civil Law perspective, but it is preferable to give a definition in the VAT regulation. In this respect we advice to develop a clear definition of the terms immovable property, building, land and building land into the VAT legislation.