Judgment of the General Court (Second Chamber, Extended Composition) of 2 September 2026.#A&P Deco NV v Belgische Staat.#Request for a preliminary ruling from the Hof van Cassatie.#Reference for a preliminary ruling – Taxation – Common system of VAT – Articles 19 and 29 of Directive 2006/112/EC – Transfer of a totality of assets or part thereof – Concomitant and separate letting contract of an immovable property – Taking over a business – Letting of a building – Building let by the transferor to the transferee of a business and used by the transferee for the purpose of carrying out the taxable activity taken over – Right of deduction – Articles 184 to 190 of Directive 2006/112 – Adjustment of the VAT deduction by the transferor.#Case T-397/25.

Provisional text

JUDGMENT OF THE GENERAL COURT (Second Chamber, sitting with five Judges)

2 September 2026 (*)

( Reference for a preliminary ruling – Taxation – Common system of VAT – Articles 19 and 29 of Directive 2006/112/EC – Transfer of a totality of assets or part thereof – Concomitant and separate letting contract of an immovable property – Taking over a business – Letting of a building – Building let by the transferor to the transferee of a business and used by the transferee for the purpose of carrying out the taxable activity taken over – Right of deduction – Articles 184 to 190 of Directive 2006/112 – Adjustment of the VAT deduction by the transferor )

In Case T‑397/25,

REQUEST for a preliminary ruling under Article 267 TFEU from the Hof van Cassatie (Court of Cassation, Belgium), made by decision of 23 May 2025, received at the Court of Justice on 2 June 2025, in the proceedings

A&P Deco NV

v

Belgische Staat,

THE GENERAL COURT (Second Chamber, sitting with five Judges),

composed of N. Półtorak, President, G. Hesse, G. Steinfatt (Rapporteur), D. Petrlík and I. Dimitrakopoulos, Judges,

Advocate General: M. Brkan,

Registrar: V. Di Bucci,

having regard to the transmission of the request for a preliminary ruling to the General Court by the Court of Justice on 20 June 2025, pursuant to the third paragraph of Article 50b of the Statute of the Court of Justice of the European Union,

having regard to the fact that the case concerns the area referred to in point (a) of the first paragraph of Article 50b of the Statute of the Court of Justice of the European Union and the fact that there is no independent question relating to interpretation within the meaning of the second paragraph of Article 50b of that statute,

having regard to the written part of the procedure,

after considering the observations submitted on behalf of:

–        A&P Deco, by H. Vandebergh, advocaat,

–        the Belgian Government, by P. Cottin, M. Jacobs and C. Pochet, acting as Agents,

–        the European Commission, by N. Cambien and M. Herold, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 15 April 2026,

gives the following

Judgment

1        This request for a preliminary ruling concerns the interpretation of Articles 14, 19, 24, 29 and 184 to 190 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’) and of the principle of neutrality of value added tax (VAT).

2        The request has been made in proceedings between A&P Deco NV and the Belgische Staat (Belgian State) concerning, first, whether the special scheme provided for in Articles 19 and 29 of the VAT Directive is applicable to an immovable property let at the same time as the transfer of a business, made in respect of the transfer of a totality of assets by the transferor to the transferee of that business, where that immovable property is used for the purpose of the taxable activity taken over, and, second, where appropriate, the effect of that scheme on the adjustment of the deductions provided for in Articles 184 to 190 of that directive.

 Legal framework

 European Union law

3        Article 14(1) of the VAT Directive provides:

‘“Supply of goods” shall mean the transfer of the right to dispose of tangible property as owner.’

4        The first paragraph of Article 19 of the VAT Directive provides:

‘In the event of a transfer, whether for consideration or not or as a contribution to a company, of a totality of assets or part thereof, Member States may consider that no supply of goods has taken place and that the person to whom the goods are transferred is to be treated as the successor to the transferor.’

5        Article 24(1) of the VAT Directive is worded as follows:

‘“Supply of services” shall mean any transaction which does not constitute a supply of goods.’

6        Under Article 29 of the VAT Directive:

‘Article 19 shall apply in like manner to the supply of services.’

7        Article 135 of the VAT Directive provides:

‘1.      Member States shall exempt the following transactions:

…

(l)      the leasing or letting of immovable property.

2.      The following shall be excluded from the exemption provided for in point (l) of paragraph 1:

(a)      the provision of accommodation, as defined in the laws of the Member States, in the hotel sector or in sectors with a similar function, including the provision of accommodation in holiday camps or on sites developed for use as camping sites;

(b)      the letting of premises and sites for the parking of vehicles;

(c)      the letting of permanently installed equipment and machinery;

(d)      the hire of safes.

Member States may apply further exclusions to the scope of the exemption referred to in point (l) of paragraph 1.’

8        Article 168 of the VAT Directive governs the right to deduct in the following terms:

‘In so far as the goods and services are used for the purposes of the taxed transactions of a taxable person, the taxable person shall be entitled, in the Member State in which he carries out these transactions, to deduct the following from the VAT which he is liable to pay:

(a)      the VAT due or paid in that Member State in respect of supplies to him of goods or services, carried out or to be carried out by another taxable person;

…’

9        Article 184 of the VAT Directive is worded as follows:

‘The initial deduction shall be adjusted where it is higher or lower than that to which the taxable person was entitled.’

10      Under Article 185(1) of the VAT Directive:

‘Adjustment shall, in particular, be made where, after the VAT return is made, some change occurs in the factors used to determine the amount to be deducted, for example where purchases are cancelled or price reductions are obtained.’

11      Article 186 of the VAT Directive states that the Member are to lay down the detailed rules for applying Articles 184 and 185.

12      Article 187(1) of the VAT Directive is worded as follows:

‘In the case of capital goods, adjustment shall be spread over five years including that in which the goods were acquired or manufactured.

…

In the case of immovable property acquired as capital goods, the adjustment period may be extended up to 20 years.’

13      Article 188 of the VAT Directive provides:

‘1.      If supplied during the adjustment period, capital goods shall be treated as if they had been applied to an economic activity of the taxable person up until expiry of the adjustment period.

The economic activity shall be presumed to be fully taxed in cases where the supply of the capital goods is taxed.

The economic activity shall be presumed to be fully exempt in cases where the supply of the capital goods is exempt.

2.      The adjustment provided for in paragraph 1 shall be made only once in respect of all the time covered by the adjustment period that remains to run. However, where the supply of capital goods is exempt, Member States may waive the requirement for adjustment in so far as the purchaser is a taxable person using the capital goods in question solely for transactions in respect of which VAT is deductible.’

14      Under Article 189 of the VAT Directive:

‘For the purposes of applying Articles 187 and 188, Member States may take the following measures:

(a)      define the concept of capital goods;

…’

15      Article 190 of the VAT Directive provides:

‘For the purposes of Articles 187, 188, 189 and 191, Member States may regard as capital goods those services which have characteristics similar to those normally attributed to capital goods.’

 Belgian law

16      The request for a preliminary ruling contains references to the wet tot invoering van het Wetboek van de belasting over de toegevoegde waarde (Law establishing the Value Added Tax Code) of 3 July 1969 (Βelgisch Staatsblad, 17 July 1969, p. 7046), in the version applicable to the dispute (‘the VAT Code’), and to the Koninklijk besluit nr. 3 met betrekking tot de aftrekregeling voor de toepassing van de belasting over de toegevoegde waarde (Royal Decree No 3 on deductions for the application of value added tax) of 10 December 1969 (Belgisch Staatsblad, 12 December 1969, p. 12006), in the version applicable to the dispute (‘Royal Decree No 3’).

 The VAT Code

17      It is apparent from the request for a preliminary ruling that, under point 2 of the second paragraph of Article 9 of the VAT Code, goods are to be understood, for the purposes of the application of that code, as tangible property, including rights in rem, other than property rights, giving the holder a right of use over the immovable property.

18      Article 10(1) of the VAT Code provides:

‘“Supply of goods” shall mean the transfer of the right to dispose of tangible property as owner.’

19      Article 11 of the VAT Code is worded as follows:

‘The transfer, whether for consideration or free of charge, in the form of a contribution to a company or otherwise, of a totality of assets or a part of a business, shall not be regarded as a supply, where the transferee is a taxable person who could deduct the tax, in whole or in part, if it were due by reason of the transfer. In that case, the transferee shall be treated as the successor to the transferor.’

20      Under Article 18(3) of the VAT Code:

‘The transactions referred to in [paragraph 1] which are effected in the event of the transfer, in the form of a contribution to a company or otherwise, of a totality of assets or a part of a business in accordance with the conditions laid down in Article 11 shall not be regarded as supplies of services.’

21      Finally, it is apparent from the request for a preliminary ruling that the VAT exemption concerning the letting of buildings follows from Article 44(3)(2) of the VAT Code.

 Royal Decree No 3

22      Under Article 9 of Royal Decree No 3, the adjustment period is extended to fifteen years in respect of buildings and rights in rem over buildings acquired with the application of the VAT system.

 The main proceedings and the question referred for a preliminary ruling

23      A&P Deco, which is a taxable person for VAT purposes, carried on business as a garden centre in business premises owned by it. It had those buildings constructed in 2004 and 2005 and carried out renovation and customisation works from 2008 to 2011. It deducted the VAT charged on those transactions.

24      On 23 January 2013, under Article 11 of the VAT Code, namely in the context of the transfer of a totality of assets, it transferred its business to the WR Woestijnroos BV company, which is also a taxable person for VAT purposes. On the same day, A&P Deco let the buildings in which it carried on business as a garden centre to WR Woestijnroos, which continued that business as a garden centre there.

25      Following an inspection of A&P Deco, the Belgian tax administration adjusted, pro rata temporis, the VAT initially deducted in respect of the works relating to the buildings at issue in the main proceedings on account of a change in the use of those buildings. According to the tax administration, the letting of those buildings constituted for A&P Deco an economic activity exempt from VAT under Article 44(3)(2) of the VAT Code and therefore did not give rise to a right to deduct VAT.

26      Following that inspection, four adjustment statements were drawn up and four orders were served, to which A&P Deco objected.

27      By judgment of 13 February 2020, the rechtbank van eerste aanleg Limburg, afdeling Hasselt (Court of First Instance, Limburg, Hasselt Division, Belgium) dismissed A&P Deco’s action as unfounded.

28      By judgment of 21 September 2021, the hof van beroep te Antwerpen (Court of Appeal, Antwerp, Belgium) dismissed the appeal brought by A&P Deco against the judgment of 13 February 2020.

29      A&P Deco brought an appeal on a point of law against the judgment of the hof van beroep te Antwerpen (Court of Appeal, Antwerp), claiming, in essence, that the fiction under which the person to whom the totality of assets is transferred is to be treated as the successor to the transferor pursuant to Articles 19 and 29 of the VAT Directive results in the obligation to adjust the VAT initially deducted by the transferor being transferred to the transferee and that, in that case, no adjustment has to be made by the transferor of the deduction of the VAT charged on the acquisition, construction, renovation or improvement of the parts of the business premises which are let to the transferee and continue to be used by the transferee to carry on the taxable activity taken over.

30      The Hof van Cassatie (Court of Cassation, Belgium), which is the referring court, considers that a solution to the dispute can be found only by an interpretation of Article 19 of the VAT Directive.

31      In those circumstances, the Hof van Cassatie (Court of Cassation) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Must Articles 14, 19, 24 and 29 and Articles 184 to 190 of the [VAT Directive], as well as the principle of [VAT] neutrality laid down in Article 1(2) of the same directive, be interpreted as meaning that, where the possession of immovable property is made available by a commercial lease following the transfer of the business, no adjustment must be made to the transferor of the business, which is also the lessor of the immovable property, in respect of the deduction of the VAT charged on the acquisition, construction, renovation or improvement of the parts of the business premises leased to the transferee and further used by the transferee for the carrying on of the taxable activity taken over?’

 Consideration of the question referred

32      By its question, the referring court asks, in essence, whether Articles 14, 19, 24, 29 and 184 to 190 of the VAT Directive and the principle of neutrality of VAT must be interpreted as meaning that, where, in the event of the transfer of a business as a transfer of a totality of assets, the transferor of that business lets, exempt from VAT, to the transferee, an immovable property and that that immovable property continues to be used by the transferee in respect of the exercise of the taxable activity taken over, an adjustment must be made, by the transferor, to the VAT deduction applied to the acquisition, construction, renovation or improvement of that property.

 Articles 14, 19, 24, 29 and 184 to 190 of the VAT Directive

 Adjustment of the initial deduction made under Articles 184 to 190 of the VAT Directive

33      According to settled case-law, the right of taxable persons, provided for in Article 167 et seq. of the VAT Directive, to deduct the VAT due or paid on goods purchased and services received as inputs from the VAT which it is liable to pay is a fundamental principle of the common system of VAT established by EU legislation (see judgment of 12 September 2024, NARE-BG, C‑429/23, EU:C:2024:742, paragraph 45 and the case-law cited).

34      The rules governing deduction are intended to relieve the taxable person entirely of the burden of the VAT due or paid in the course of all its economic activities. The common system of VAT therefore ensures neutrality of taxation of all economic activities, whatever their purpose or results, provided that those activities are themselves, in principle, subject to VAT (see judgments of 15 September 2016, Senatex, C‑518/14, EU:C:2016:691, paragraph 27 and the case-law cited, and of 12 September 2024, NARE-BG, C‑429/23, EU:C:2024:742, paragraph 46 and the case-law cited).

35      Articles 184 to 185 of the VAT Directive set out in general terms the conditions under which the national tax authorities must require an adjustment of the initial deduction of VAT. By contrast, Articles 187 to 189 of that directive provide for specific rules for the adjustment of VAT deductions as regards capital goods (see judgment of 27 March 2019, Mydibel, C‑201/18, EU:C:2019:254, paragraph 22 and the case-law cited).

36      The adjustment mechanism, provided for by those articles and forming an integral part of the VAT deduction scheme, is intended to enhance the precision of deductions so as to ensure the neutrality of VAT, so that transactions effected at an earlier stage continue to give rise to the right to deduct only to the extent that they are used to make supplies subject to VAT. That mechanism thus aims to establish a close and direct relationship between the right to deduct input VAT and the use of the goods or services concerned for taxable output transactions (see judgment of 27 March 2019, Mydibel, C‑201/18, EU:C:2019:254, paragraph 27 and the case-law cited).

37      It is apparent from Articles 184 to 190 of the VAT Directive that an adjustment is necessary where, after the initial deduction, the factors taken into account in order to determine the right to deduct were altered, in particular where the taxable person no longer uses those goods for transactions in respect of which VAT is deductible.

38      In the present case, it is apparent from the order for reference that A&P Deco let to the transferee of the business a part of the immovable property previously used in respect of the taxable output transactions. As the referring court states, that letting activity is exempt from VAT in accordance with the VAT Directive and the applicable national legislation. In those circumstances, and as the Advocate General observed in point 21 of her Opinion, the fact that those immovable property are no longer used to carry out taxable transactions leads to a change in the factors which must be taken into account in order to determine the right to deduct. It follows that a proportional adjustment of the initial deduction of VAT must be carried out (see, to that effect, judgment of 17 September 2020, Stichting Schoonzicht, C‑791/18, EU:C:2020:731, paragraphs 35 and 36).

39      That conclusion is not called into question by the judgment of 27 March 2019, Mydibel (C‑201/18, EU:C:2019:254), which concerned a different situation, as the Advocate General observed, in essence, in point 22 of her Opinion. In that case, the Court ruled in a context characterised by the retention by the owner of the property concerned of the use of that property for taxable output transactions, notwithstanding the sale and lease back transaction at issue. By contrast, the situation at issue in the main proceedings differs in that immovable property, initially used for an economic activity subject to VAT, namely the garden centre, is now used for the purposes of an exempt transaction, under Article 135(1)(l) of the VAT Directive, and the applicable national legislation, namely letting.

40      Furthermore, in the event of adjustment of a VAT deduction applied by a taxable person, the amounts due in that regard must be paid by that taxable person. Requiring a deduction applied by the landlord of immovable property to be adjusted by his or her tenant of that property would be tantamount to requiring the latter to pay a tax debt pertaining to a transaction in which he or she had no involvement and which was carried out in connection with the economic activity of another taxable person (see, to that effect, judgment of 26 November 2020, Sögård Fastigheter, C‑787/18, EU:C:2020:964, paragraphs 50 and 54 and the case-law cited).

41      However, the referring court asks more specifically whether the fact that the business premises is let exempt from VAT to the recipient of the transfer of a totality of assets within the meaning of Articles 19 and 29 of the VAT Directive precludes the obligation to adjust for the transferor of the business and landlord of the building used by the transferee in respect of the taxable activity taken over.

 The effect of the special scheme applicable to the transfer of a totality of assets within the meaning of Articles 19 and 29 of the VAT Directive on the adjustment of the deductions

42      The first paragraph of Article 19 of the VAT Directive provides that the Member States may consider that in the event of a transfer of a totality of assets, no supply of goods has taken place and the person to whom the goods are transferred is to be treated as the successor to the transferor. Article 29 of the VAT Directive provides that Article 19 is to apply in like manner to the supply of services.

43      The first paragraph of Article 19 of the VAT Directive is identical to that of Article 5(8) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1). Thus, the Court’s case-law relating to that provision can be transposed mutatis mutandis to the first paragraph of Article 19 of the VAT Directive (judgment of 19 December 2018, Mailat, C‑17/18, EU:C:2018:1038, paragraph 13).

44      It follows from the first paragraph of Article 19 and Article 29 of the VAT Directive that, where a Member State has exercised the option provided for by those provisions, the transfer of a totality of assets or part thereof is not regarded as a supply of goods or services for the purposes of the VAT Directive and is not subject to VAT under Article 2 of that directive (see, to that effect, judgment of 30 May 2013, X, C‑651/11, EU:C:2013:346, paragraph 29 and the case-law cited, and order of 16 January 2023, Dyrektor Izby Administracji Skarbowej w Łodzi, C‑729/21, not published, EU:C:2023:74, paragraph 35).

45      The Kingdom of Belgium has made use of the option provided for in the first paragraph of Article 19 and in Article 29 of the VAT Directive.

46      As regards the concept of a ‘transfer of a totality of assets’, it must be interpreted as covering the transfer of a business or an independent part of an undertaking, including tangible elements and, as the case may be, intangible elements which, together, constitute an undertaking or a part of an undertaking capable of carrying on an independent economic activity, but that it does not cover the simple transfer of assets, such as the sale of a stock of products (see judgment of 19 December 2018, Mailat, C‑17/18, EU:C:2018:1038, paragraph 14 and the case-law cited).

47      In order to find that there has been a transfer of a business, or of an independent part of an undertaking, all of the elements transferred must, together, be sufficient to allow an independent economic activity to be carried on and the question whether there must be both movable and immovable assets among those elements must be assessed in the light of the nature of the economic activity at issue (see judgment of 19 December 2018, Mailat, C‑17/18, EU:C:2018:1038, paragraph 15 and the case-law cited).

48      Thus, where an economic activity does not require the use of particular premises or of premises equipped with fixtures necessary for the pursuit of the economic activity, there may be a transfer of a totality of assets within the meaning of the first paragraph of Article 19 of the VAT Directive even without the transfer of ownership of an immovable asset (see judgment of 19 December 2018, Mailat, C‑17/18, EU:C:2018:1038, paragraph 17 and the case-law cited).

49      Furthermore, even if an economic activity requires the use of such premises, a transfer of a totality of assets may also take place if those premises are made available to the transferee by means of a lease contract (judgment of 10 November 2011, Schriever, C‑444/10, EU:C:2011:724, paragraphs 29, 34 and 36).

50      In the light of the case-law recalled in paragraphs 46 to 49 above, the transaction at issue in the main proceedings may be classified as a transfer of a totality of assets.

51      The referring court is uncertain, however, whether the letting of the building at issue, in order to enable the economic activity transferred to continue, is itself part of the transfer of a totality of assets within the meaning of Articles 19 and 29 of the VAT Directive.

52      In the first place, although it is apparent from the considerations set out in point 47 above that an intangible element, such as the letting right, may form part of the transfer of a totality of assets within the meaning of Articles 19 and 29 of the VAT Directive, such an element must exist prior to such a transfer. Accordingly, a letting right can be regarded as forming part of such a transfer only if it existed prior to that transfer and if it was transferred as an intangible element of the business. By contrast, where the transferor, in his or her capacity as owner of the immovable property, enters into a new commercial lease with the transferee in the event of that transfer, he or she does not transfer a pre-existing right, that is to say, already present in the transferor’s assets, but creates a new right limited in time. In those circumstances, such a right cannot be regarded as forming part of the transfer of a totality of assets.

53      In the second place, the fact that the first paragraph of Article 19 and Article 29 of the VAT Directive provide that the recipient is to be treated as the successor to the transferor is merely a result of the fact that no supply of goods or services is considered to have taken place (see, to that effect, judgment of 27 November 2003, Zita Modes, C‑497/01, EU:C:2003:644, paragraph 43 and the case-law cited, and order of 16 January 2023, Dyrektor Izby Administracji Skarbowej w Łodzi, C‑729/21, not published, EU:C:2023:74, paragraph 36). Accordingly, that fiction concerns only goods and services that were not regarded as a supply of goods or a service. However, the creation of a letting right by the transferor owner of immovable property does not amount to the transfer of a pre-existing right (see paragraph 52 above).

54      It follows that the letting right of the building established by the transferor-landlord to the transferee in the event of a transfer of a business between them, in order to enable the transferee to continue the economic activity transferred in that building, does not form part of the transfer of a totality of goods or services within the meaning of Articles 19 and 29 of the VAT Directive.

55      Consequently, the transferor of the business and landlord of the building used by the transferee in respect of the taxable activity taken over remains bound by the obligation to adjust, without the fact that the transferee carries out the taxable activity taken over in the context of the transfer of a totality of assets being such as to call into question the transferor’s obligation to adjust. That fact has no bearing on the position of the transferor-landlord stated in paragraphs 38 and 39 above, on the basis of which he or she now uses the building concerned for an activity exempt from VAT.

56      That conclusion is not called into question by the judgment of 29 April 2004, Faxworld (C‑137/02, EU:C:2004:267), in which the Court recognised a partnership’s right to deduct input tax even though that partnership had not itself carried out a taxable transaction, thus enabling it to take into account the taxable transactions of the transferee. The factual context of the case which gave rise to that judgment was very different, given that the transfer of the totality of assets at issue in that case resulted from the cessation of the transferor’s activity, which was a Vorgründungsgesellschaft, that is to say, a civil-law partnership the object of which was to prepare the means necessary for the activities of a capital company yet to be formed.

57      The Court pointed out that that partnership did not even intend, as a Vorgründungsgesellschaft, to effect itself taxable transactions, its sole object being to prepare the activities of a limited company and that, in those precise circumstances, it had to be held that a Vorgründungsgesellschaft, as the transferor of a totality of assets, had to be entitled to take account of the taxable transactions of the recipient, namely the limited company, so as to be entitled to deduct the VAT paid on input services which have been procured for the purposes of the recipient’s taxable operations (judgment of 29 April 2004, Faxworld, C‑137/02, EU:C:2004:267, paragraphs 41 and 42). That strict limitation to the present case is also reflected by the wording of the operative part of that judgment, according to which a partnership established for the sole purpose of founding a capital company is entitled to deduct the input tax paid on supplies of goods and services where its only output transaction in the performance of its object was to effect by formal act the transfer for consideration of the supplies obtained to that company once founded and where other conditions are met.

 The principle of fiscal neutrality

58      The interpretation of Articles 19 and 29 of the VAT Directive, as set out in paragraphs 42 to 57 above, is, moreover, supported by the principle of neutrality of VAT.

59      The adjustment mechanism provided for in Articles 184 to 186 of the VAT Directive is intended to increase the precision of deductions so as to ensure the neutrality of VAT, with the result that transactions carried out at the preceding stage continue to give rise to the right to deduct only in so far as they are used to provide services subject to that tax. That mechanism thus aims to establish a close and direct relationship between the right to deduct input VAT and the use of the goods or services concerned for taxable output transactions (see paragraph 36 above).

60      The principle of neutrality of VAT was intended also by the EU legislature to reflect, in matters relating to VAT, the general principle of equal treatment. It precludes in particular treating economic operators carrying out the same transactions differently for VAT purposes (see judgment of 25 February 2026, Digipolis, T‑575/24, EU:T:2026:156, paragraph 88 and the case-law cited).

61      In the present case, as the Advocate General stated, in essence, in points 50 and 51 of her Opinion, first, if an initial deduction were to continue to be granted even though the goods in question are now being used to carry out transactions not subject to VAT, such as the letting of buildings, that fact would undermine the principle of neutrality of VAT (see, to that effect, judgments of 3 June 2021, Administraţia Judeţeană a Finanţelor Publice Suceava and Others, C‑182/20, EU:C:2021:442, paragraph 29, and of 12 September 2024, Drebers, C‑243/23, EU:C:2024:736, paragraph 46). Second, it cannot be considered that the distinction made between the letting of a building at the same time as the transfer of a business and the sale of such a building in the context of a transfer of an undertaking undermines the principle of fiscal neutrality. In the first situation, the transferor-landlord carries out, after the transfer of the business and the letting of the immovable property, by means of the letting of that building, an economic activity which is exempt under Article 135(1)(l) of the VAT Directive and the applicable national legislation and is, in that regard, in a situation comparable to that of a third party letting a commercial building to the recipient of the transfer of a totality of assets, who cannot deduct the input tax paid on the acquisition, construction, renovation or improvement of those buildings.

62      In the light of the foregoing, the answer to the question referred for a preliminary ruling is that Articles 14, 19, 24, 29 and 184 to 190 of the VAT Directive and the principle of neutrality of VAT must be interpreted as meaning that, where, in the event of the transfer of a business as a transfer of a totality of assets, the transferor of that business lets, exempt from VAT, to the transferee, an immovable property and that property continues to be used by the transferee in respect of the exercise of the taxable activity taken over, an adjustment must be made, by the transferor, to the VAT deduction applied to the acquisition, construction, renovation or improvement of that immovable property.

 Costs

63      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds,

THE GENERAL COURT (Second Chamber, sitting with five Judges)

hereby rules:

Articles 14, 19, 24, 29 and 184 to 190 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, and the principle of neutrality of VAT,

must be interpreted as meaning that where, in the event of the transfer of a business as a transfer of a totality of assets, the transferor of that business lets, exempt from VAT, to the transferee, an immovable property and that property continues to be used by the transferee in respect of the exercise of the taxable activity taken over, an adjustment must be made, by the transferor, to the VAT deduction applied to the acquisition, construction, renovation or improvement of that immovable property.

Delivered in open court in Luxembourg on 2 September 2026.

[Signatures]

---

*      Language of the case: Dutch.