European Union:
ECJ – A Sale Of Shares Alone Cannot Be A TOGC
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Summary and implications
In the case of Staatssecretaris van Financiën v X
BV, the European Court of Justice (the ECJ) made a preliminary
ruling that:
- a sale of shares on their own cannot be a transfer of a going
concern (TOGC);
- this applies regardless of the size of the shareholding;
and
- the only instance where a sale of shares can be a TOGC is if
the shareholding is part of an independent unit allowing an
independent economic activity, for instance share trading, to be
carried on and the transferee carries out that independent economic
activity.
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