VAT in case of an online business takeover
When a company is sold, the transaction is accomplished through a share transaction (B.V.) or an asset transaction (B.V., sole proprietorship, VOF). In the first case, the shares are transferred and with them all the assets, debts, rights and obligations of a company. In the second case, only the assets (and sometimes liabilities) are transferred. Think of the online business, stock, supplier contacts, inventory, mailing lists, domain names, etc.
By definition, a share transaction involves a transfer of a company and an asset transaction may involve a transfer of a company. And precisely this element is important to determine whether VAT applies in an online business takeover or not:
Transfer of business
It is not always easy to determine whether there is a transfer of business, but in general you can say that if there is a transfer of all business activities (inventory, online business, goodwill, company name, trademarks, stock, possibly premises - all necessary items to continue the online business under the same identity on a comparable basis) that there is a transfer of business. It is referred to as an "Article 37d transfer" in this case.
Therefore, if only a few assets are sold: for example, only the stock or a customer list, then there is no transfer of business.
VAT in the case of business transfer
Once it has been determined whether there is a transfer of the company, it is also clear whether VAT applies. If the answer is yes, then no VAT needs to be levied on the purchase price. Thus, the seller does not charge VAT and the buyer does not reclaim it from the tax authorities. This applies to the entire sum, including the stock taken over.
This arrangement was created so as not to hinder business acquisitions due to liquidity disadvantages for the buyer of the business.
And if it is determined that there is no transfer of business (for example, only inventory is taken over), then the seller is obliged to charge VAT and the buyer can reclaim it from the tax authorities.
Why is VAT important in online business takeovers?
If a seller wrongly assumes that he is selling an online business according to the principle of transfer of business, but this subsequently turns out not to be the case, he runs the risk of an additional tax assessment. And vice versa, if the seller wrongly charges VAT, the buyer runs the risk of an additional tax due to deduction of wrongly calculated VAT!