European Union, Spain and CJEU: every sale of immovable property by a judgment debtor within an insolvency proceeding is considered “a compulsory sale procedure”

June 20, 2013

On 13 June 2013, the Court of Justice of the European Union (CJEU) gave its decision in the case of Promociones y Construcciones BJ 200 S.L. (C-125/12). The Commercial Court (Juzgado de lo Mercantil) No. 1 of Alicante had requested a preliminary ruling from the CJEU on 8 March 2012.

The CJEU proceeded to deliver its judgment without an opinion from the Advocate General.

The CJEU held that:

Article 199(1)(g) of Council Directive 2006/112/EC of 28 November 2006 (on the common system of VAT (EU VAT Directive (2006/112)) must be interpreted as meaning that every sale of immovable property by a judgment debtor carried out not only in the course of the liquidation of the debtor’s assets but also in the course of insolvency proceedings occurring before such liquidation, falls within the concept of a “compulsory sale procedure,” provided that such a sale is necessary in order either to settle creditors’ claims or to enable the debtor to re-establish its economic or professional activities.


icon ©copyright IBFD. This article is part of a selection of daily news from the IBFD Tax News Service (TNS) chosen by EY professionals. All rights to the content reside with IBFD. Any use requires IBFD’s prior permission in writing. IBFD´s disclaimer applies to any and all of IBFD’s articles and publications.
EY refers to one or more of the member firms of Ernst & Young Global Limited (EYG), a UK private company limited by guarantee. EYG is the principal governance entity of the global EY organization and does not provide any service to clients. Services are provided by EYG member firms. Each of EYG and its member firms is a separate legal entity and has no liability for another such entity's acts or omissions. Certain content on this site may have been prepared by one or more EYG member firms.