Project development and VAT-free transfer of rented new property

Recently, the Arnhem-Leeuwarden Court of Appeal (hereafter: the Court of Appeal) decided in two cases, contrary to previous case law confirmed that the sale and delivery of newly manufactured real estate by a project developer can still qualify as a a VAT-free transfer of a totality of goods as of goods as referred to in Article 37d of the Turnover Turnover Tax Act 1968 (hereinafter referred to as: Wet OB). In the first instance the court ruled that this could not be the case. The relevance of these judgments lies in whether or not 21% VAT is owed by the buyer. Especially in cases where there is no (full) right to deduct VAT, these rulings are of great importance for the Real Estate Sector.

Source EY

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