VAT on housing rent for foreign temporary workers is not deductible

The Court of Appeal of ‘s-Hertogenbosch has ruled that X bv incorrectly deducted VAT for accommodations provided to foreign temporary workers.
X bv operates a temporary employment agency and provides accommodation for its foreign employees.
The inspector argued that the VAT on these accommodations is not eligible for deduction under art. 1 paragraph 1 part c BUA.
The District Court of Zeeland-West-Brabant initially ruled in favor of X bv, citing a Supreme Court judgment.
However, the Court of Appeal found that X bv did not provide sufficient evidence of special circumstances that would justify the deduction.
The information provided by X bv was deemed too general and indirect. Therefore, the deduction was deemed incorrect.