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In its decision C-931/19 (“Titanium case”), the Court of Justice of the European Union (“CJEU”) ruled that a foreign company should not be considered as having a fixed establishment for VAT purposes in a Member State if its activity in that country is limited to the ownership and the exploitation of real estate without having any human resources locally.
Consequently, a Luxembourg property company (hereafter “PropCo”), with legal seat and place of management in Luxembourg, owning and exploiting German real estate should not be considered as having a fixed establishment for VAT purposes in Germany if it does not have human resources in Germany to operate the underlying asset.
While this court case is in continuity of settled case-law on the concept of fixed
establishment, it might have specific impacts for Luxembourg PropCos operating German buildings, considering the specific German administrative practice.
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