Commentary

V4.114 Land subject to an option to tax—introduction

Part V4 Exemption, zero-rating and reduced rates

V4.114 Land subject to an option to tax—introduction

V4.114 Land subject to an option to tax—introduction

On 21 June 1988, the ECJ held1 that the UK, in allowing the zero-rating of the construction and sale of commercial property, had contravened the provisions of art 17 of Directive 67/228/EEC (the Second Directive)2 and had therefore failed to fulfil its obligations under the EU Treaty3. (The UK's policy of applying the zero rate to residential property was regarded as being for 'social reasons' for the purpose of art 17, and therefore was not in contravention.) As a result, the UK was obliged to impose VAT, with effect from 1 April

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