Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ — Sofia v ‘Iberdrola Inmobiliaria Real Estate Investments’ EOOD

In Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ — Sofia v ‘Iberdrola Inmobiliaria Real Estate Investments’ EOOD (Case C-132/16) (14 September 2017) the CJEU found that a property developer was entitled to recover VAT on the construction of a pump station necessary to connect its buildings to mains sewage even though the municipality also freely benefited from the pump free of charge.

The municipality of Tsarevo (Bulgaria) had obtained a building permit in order to reconstruct a waste-water pump station serving a holiday village. Iberdrola had purchased several parcels of land in that holiday village with a view to building accommodation. The company had also entered into a contract with the municipality for the reconstruction of the pump station which was necessary as the sewer system was insufficient. Iberdrola had sub-contracted the work and the tax authorities considered that the VAT...