Court decisions on transfers of real property as transfers of going concern for VAT purposes
The Arnhem-Leeuwarden Court of Appeals held in two recent cases—seemingly contrary to an earlier decision of 2018—that transfers of real property leased by a developer for a short term qualified as transfers of a going concern for value added tax (VAT) purposes.
In both cases, the property had been leased on a VAT-exempt basis. As a result of these decisions, the VAT due on the transfers of the property is limited to the non-recoverable VAT on the renovation costs, land costs, if any, and additional costs, rather than the non-recoverable VAT on the purchase price.
Source KPMG
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