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Court of Appeal of ‘s-Hertogenbosch: No VAT group due to lack of organizational interdependence

The court of appeal is of the opinion that the interested party, in the face of the substantiated challenge by the inspector, has not made it plausible that [hospital] and the interested party are organizationally intertwined. The circumstance that [hospital] prepares an annual budget in which the budget for cleaning costs is set does not mean that there is joint management or de facto subordination. After all, in a relationship between a client and a contractor, this situation will (can) also occur. The same applies to the circumstance that [hospital] demands that cleaning work be done in accordance with certain protocols. The examples cited by the interested party are also not or hardly accompanied by documentary evidence. As a result, the interested party does not make it clear and therefore does not make it plausible that certain choices, whereby the interested party in its cooperation with the [hospital] brings in its cleaning knowledge and [hospital] its hospital knowledge, are the result of joint management between [hospital] and the interested party or a management of the interested party that actually operates subordinately to the management of [hospital] in the sense referred to above under 4.7. Even in a relationship between a client and a contractor, it is not uncommon for certain demands to be made by the client regarding the cost of the work and the manner in which it is performed. In other words, the interested party does not make it clear and plausible that, in the present case, this is the result of a jointly operating management between [hospital] and the interested party or a management that operates de facto subordinately to that of [hospital] .

With regard to the actual subordination, the court adds the following. The inspector has argued that it follows from article 5.2, paragraph 2, of the articles of association that the board of the interested party should focus on the interests of the interested party and the material company affiliated with the interested party, and that it follows from article 5.4, paragraph 5, of the articles of association that the board of the interested party is obliged to follow the instructions of the general meeting of shareholders, unless these are in conflict with the interests of the interested party and the material company it runs. Interested party has not made it plausible – by naming examples without sufficient (written) substantiation – that instructions were nevertheless given and followed by the board of [hospital], in particular regarding policy decisions of essential importance. It also applies that it does not follow from the mere circumstance that Mr. Van der Wal is also employed by [hospital] that as director of the interested party he is actually subordinate to the management of [hospital].

With regard to the joint management, the Court of Appeal adds the following. The inspector has argued that, inter alia, from the fact that [hospital] and [B.V. 1] have made agreements on the conditions under which and the price for which the cleaning takes place and from the fact that the hospital and [B.V. 1] have made agreements on the way in which they cooperate within the [B.V. 2] (see 2.1), it is abundantly clear that precisely [B.V. 1] and [hospital] have committed themselves, with respect to the complementary activity, to determine the strategy and the commercial and organizational policy together. This arises in any case when those persons have committed themselves vis-à-vis each other to jointly determine the strategy and the commercial and organizational policy in respect of the complementary activity. Although the answer to the question of whether there are such close ties in management and leadership between the interested party and [hospital] is not precluded by the fact that a third party – [B.V. 1] – has co-determination therein, the interested party – by naming examples without sufficient (written) substantiation – has not made it plausible that, despite the role of [B.V. 1], there has been such joint management between [hospital] and the interested party.

Source: uitspraken.rechtspraak.nl

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