Explanatory notes on EU VAT place of supply rules
on services connected with immovable property
that enter into force in 2017
60. The linguistic divergences in the VAT Implementing Regulation are symptomatic in
this respect: certain language versions refer to ‘title and possession’ while others
refer to ‘title or possession’. This shows that even if in most circumstances actual
title and possession will belong to the same person, it may also be that title is
attributed to one person and possession to another. Therefore ‘title and
possession’ can be interpreted as ‘title or possession”, or, ‘title and possession’.
61. Moreover, the choice of the wording ‘can be created’ means that goods can also
qualify as immovable property even if at the moment of the assessment nobody
holds actual title or possession over these goods. It is sufficient that title or
possession can be created which reflects the potential broad scope of this
provision as only immovable goods that could not belong to anybody, in the sense
described above, would not be covered by it
.
62. Typically, title and possession over immovable goods are represented by a title
deed and/or a registration in an official registry. However, these constitute only
the proof of the title and possession. There could be different ways to evidence
title and possession and even without this proof, it would be necessary to
determine whether title and possession could be created.
63. Inalienable immovable goods, such as public property (e.g. lakes, inland
waterways, harbours, public parks), are also covered by Article 13b(a) even when
the title over them is not transferrable. Apart from the fact that their legal status
can change over time under public authorities' decisions, they can also be the
object of supply of services (e.g. construction works, exploitation licenses) which
will be considered as services connected with immovable property.
Article 13b(b) any building or construction fixed to or in the ground above or below sea
level which cannot be easily dismantled or moved;
2.2.2 What is covered by Article 13b(b)?
2.2.2.1. What is meant by buildings and constructions under Article 13b(b)?
64. A building can be defined as a (man-made) structure with a roof and walls such as
a house or factory.
65. The term ‘construction’ has a broader meaning and encompasses other (man-
made) structures that do not typically qualify as a building (for additional
explanations on items, equipment and machines that can qualify as immovable
property, see from point 2.2.3 to 2.2.4 below). Constructions may include civil
engineering work, such as roads, bridges, airfields, harbours, dikes, gas pipelines,
water and sewerage systems as well as industrial installations such as power
generating plants, wind turbines, refineries, etc.
66. It is worth noting that buildings or constructions shall be considered immovable
property in all their constitutive parts. The term ‘constitutive’ not only refers to
the frame of the building or construction but also to every item installed and
making up an integral part of this building or construction or permanently
installed into it, making up a whole in such a way that in the absence of these
items the building or construction would be incomplete or its integrity altered. The
extent to which these items that are installed in a building or construction should
also qualify as immovable property is detailed under points 2.2.3 to 2.2.4 below.
Since some concerns might arise concerning international waters, it is worth mentioning in this respect that
according to the United Nations Convention on the Law of the Sea, the high seas are open to all States. Even if no
State may validly subject any part of the high seas to its sovereignty, a State (or a person in its jurisdiction) may
carry out activities such as drilling, dredging, excavation of the seabed or ocean floor and subsoil of the high seas.
Those works will relate to immovable property, even if nobody has sovereignty over this part on the earth.