Germany's Federal Fiscal Court delivered two judgments on 13 November 2025 clarifying the requirements for VAT-exempt transfers of going concerns under Section 1 paragraph 1a of the German VAT Act, addressing both the continuation of business activities and the scope of asset transfers required.
Continuation Requirements
In case V R 3/23, the Court ruled that a transfer of going concern can occur through consecutive transfers, but the final acquirer must intend to continue the business. The case involved a fish farming business sold to two purchasers who subsequently leased the entire operation to a newly established limited liability company. The Court held that a lessee is not an acquirer for going concern purposes and that the lessee's intention to continue business operations is irrelevant—only the acquirer's intention at the time of transfer matters.
Asset Transfer Scope
In parallel cases V R 32/24 and V R 33/24 involving solar park sales, the Court rejected going concern treatment where the seller retained value-determining economic activities. The plaintiff solar park operator sold individual infrastructure components to sub-limited partnerships but retained central infrastructure, grid connections, and feed-in contracts under the Renewable Energy Sources Act. Since the seller continued performing the economically significant electricity feed-in activity and collecting EEG remuneration, no functional business transfer occurred.
Context
These decisions reinforce that German going concern exemptions require genuine business continuation by acquirers rather than third-party lessees, and mandate transfer of economically significant business components beyond mere technical assets. The rulings come amid ongoing preliminary ruling procedures before the General Court addressing contentious going concern questions involving substantial tax amounts.
