BFH on the sale of solar power plants

Facts

The operator of a solar park sold its solar installations in ten parts to ten sub-companies. Thereafter, it purchased the electricity generated by the solar installations from the sub-companies and fed it into the electricity grid in return for consideration. The sub-companies were unable to do this themselves because the grid connection and feed-in agreement was non-transferable. They would only have been able to conclude their own agreements on less favourable terms.

The question was whether the sale of the solar installations constituted a non-taxable sale of a totality of assets.

BFH ruling

Although a sale of a totality of assets does not require the seller to cease their business activities, it cannot be assumed that the purchaser will continue the seller’s activities if the seller continues to carry out their activities themselves without change. Under the provisions of the Renewable Energy Sources Act (EEG), the seller remains the plant operator even after the sale, irrespective of civil law ownership; only the seller is entitled to the remuneration. Therefore, the sub-companies did not continue the economic activity, as the seller still operates this activity himself. There is therefore no transfer of business. This is not contradicted by the fact that the seller no longer produces the electricity fed into the grid himself. The sale of the plants is therefore VAT taxable.

Analysis

The BFH did not need to address the question whether a transfer of a totality of assets was even possible in the case of multiple purchasers. The Schleswig-Holstein Fiscal Court had already considered this issue and ruled that this was in any event excluded if it led to a fragmentation of the business, as had been the case here.

The decision demonstrates once again that VAT law can diverge from civil law because VAT terms are to be interpreted autonomously: the transfer of ownership of the plant and machinery to the sub-companies was not, in itself, sufficient to constitute a transfer of a totality of assets.

This decision is one of two judgments on the subject of the transfer of a totality of assets that have just been published. Information on decision V R 3/23 concerning multiple transfers can be found here. Furthermore, a Polish referral to the ECJ under case number T-366/25 concerning the conditions for the transfer of a totality of assets is currently pending.

Author: Nadia Schulte