Dutch law does not allow a VAT entrepreneur to deduct input tax through the adjustment procedure. According to the Court of Justice of the EU, this arrangement is not in conflict with EU law.
A VAT entrepreneur had bought ten plots of undeveloped land from a company. It was intended that these plots be developed for recreational purposes. That would be done by building mobile homes on it. On delivery, the company charged the entrepreneur VAT. The entrepreneur failed to deduct this VAT. Due to economic circumstances, the intended development of the plots never got off the ground. When the entrepreneur sold two lots back to the company, he did not charge and did not pay VAT. The tax authorities therefore imposed an additional assessment on him. Subsequently, the entrepreneur lodged an objection and appeal. In addition, he stated that the tax authorities had to reduce the additional assessment by the VAT paid on the delivery of the relevant parcels at the time of purchase. According to the man, this was possible with the help of the review scheme. The lower tax judges agreed with him.
Source Taxence
Join the Linkedin Group on ECJ VAT Cases, click HERE
Latest Posts in "European Union"
- ECJ Rules Non-Transactional Profit Adjustments by Principal Are VAT-Applicable Services in Arcomet Case
- Understanding VAT Implications on Transfer Pricing: Insights from Arcomet Case C-726/23
- VAT Implications on Transfer Pricing Adjustments: Insights from Acromet Towercranes Case
- CJEU Ruling: Transfer Pricing Adjustments Impact VAT in Arcomet Case (C-726/23)
- EU Court of Justice Rules Transfer Pricing Payments Subject to VAT in Arcomet Case
