In a case before the Dutch lower court, the question was raised if a boiler can be part of a building for VAT purposes.
A technical installation company supplies and installs central heating installations, geysers and boilers. This company also rents out these devices. It charges VAT to customers. It further takes the view that the rental of these devices must be considered as the rental of immovable property and that the VAT exemption applies.
The rental contract takes as a starting point that the lessor (the installation company) remains the owner of the devices, after installation.
According to a judgment of the Dutch Supreme Court of September 8, 1993 (number 28 993, BNB 1993/308) homes in which central heating boilers are placed must be regarded as unfinished as they are not (yet) suitable to be used as a residential home. According to the common opinion, the boilers should be regarded as a an integral part of the house in which they are installed.
In the opinion of the regional court, the same applies to the geysers and boilers that have been installed in normal homes and apartments, that are equipped with pipes and taps for hot and cold running water and in which a a shower and/or bath has been installed. Without a (central) geyser or boiler, the homes must be considered incomplete and they cannot meet their purpose.
This judgment does not alter the fact that the geysers and boilers in question are devices of a standard type, that is to say that they are not specifically designed for a specific (type of) house and that, according to the court, they can be removed in a relatively simple manner and without significant damage being caused to the home or part of the home in which they have been installed.
The court comes to a different judgement with regard to the kitchen boiler (with a maximum of 30 liters). This device generally only fulfills an additional function; the hot water taps in the kitchen in normal homes could also be connected to the central hot water supply.
Source: www.rechtspraak.nl
Author: Joyce Westerveld, VAT Advisor at RED
