Apartments are essentially new construction (subject to VAT), not a transfer of generality of goods

X develops real estate and buys an office building for this purpose. After renovation, X rents out the developed apartments from August 2017. In November 2017, X will deliver the property to an investment company. X does not charge any sales tax for the delivery. According to X, no turnover tax is due because there is no production or a transfer of a generality of goods. The inspector states that turnover tax is due and imposes an additional assessment for November 2017. X appeals.

Gelderland District Court ruled that the delivery is subject to sales tax. The changes to the property and the relationship between the purchase costs and the purchase price are such that it is essentially new construction. The court also ruled that the activity intended by X was the sale of the building and not the rental. There is no question of a transfer of a generality of goods now that the property was kept as stock. The court does, however, set aside the fine decision because of a pleadable position. The appeal is well-founded to that extent.

Source Taxlive.nl

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