The District Court of Noord-Holland rules that the investment fund is not entitled to deduct input tax. It does not carry out any economic transactions and therefore does not qualify as a VAT entrepreneur. If an investment fund itself needs the purchased advisory services to make investment decisions, there is no direct link between these costs and the services rendered later. Although this case specifically relates to the deduction of VAT on transaction costs for PE funds, this ruling deals with matters that are relevant in broader practice. From a VAT perspective, it is important to always assess prior to a transaction where costs belong and to properly record the background in writing in case of charging.
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