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No input tax deduction because yacht rental is not plausible

No input tax deduction because yacht rental is not plausible

A BV is the holding company of B BV and C BV. A BV has bought a motor yacht for an amount of € 38,500 from the sole proprietorship that has listed the delivery of the yacht as an intra-Community supply and has applied the 0% rate. As a result of an audit, the Tax and Customs Administration hasconcluded that A BV wrongly failed to take into account an intra-Community acquisition in its returns, in respect of which it owes €8,085 in VAT. In addition, it was concluded that A BV wrongly deducted an amount of € 53 in input tax in its returns and is not entitled to deduct input tax in respect of the intra-Community acquisition of the yacht, because A BV is not an entrepreneur for VAT purposes. In accordance with the corrections proposed in the audit report, the Tax and Customs Administration has imposed an additional assessment of €8,138.

According to the District Court of Zeeland-West-Brabant, A BV has not made it sufficiently plausible that it has carried out activities aimed at obtaining sustainable income from it. In addition, the court considers it important that no rental agreement for the yacht had yet been drawn up with B BV. A BV has also not made it plausible that a rental agreement for the yacht was concluded with B BV in a later year or that further agreements were made between the two parties regarding the use of the yacht by B BV and the compensation to be received by A BV for this. The court concludes that A BV cannot be regarded as a VAT entrepreneur. This means that A BV is not entitled to deduct input tax.

Source BTW jurisprudentie

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