Court of Justice (Fourth Chamber) 12 July 2012, C‑326/11 (J.J. Komen en Zonen Beheer Heerhugowaard BV v Staatssecretaris van Financiën.)

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The Court of Justice (Fourth Chamber) addressed whether the supply of a building undergoing partial demolition work, with transformation into a new building to be completed by the purchaser after acquisition, falls within the VAT exemption under Article 13B(g) of the Sixth VAT Directive or is subject to VAT as the supply of a new building before first occupation under Article 4(3)(a). The decisive issue was whether, at the time of supply, the property could be classified as a new building under transformation, given that only partial demolition had been carried out by the vendor and the old building remained at least partially in use. The Court held that Article 13B(g), read in conjunction with Article 4(3)(a), must be interpreted as meaning that the VAT exemption applies to such a supply where, at the time of supply, the old building had only undergone partial demolition and was still at least partially used as such, precluding classification as a supply before first occupation in the context of a building transformation.AI