Ignoring or not ignoring vacancy for VAT?

• According to a court ruling, if a vacation home owner in the Netherlands has their property vacant, they must pay VAT on the fictitious private use of the property.
• This applies when it is not contractually excluded that the owner can use the property privately during the vacancy.
• The court ruling states that even if the property is not actually used, it is still considered private use for VAT purposes.
• However, if the vacation home is exclusively intended for taxable rental, except for occasional private use, the vacancy should be treated the same as when the owner has to call the manager during office hours to use the property.
• In both cases, the vacation home is not immediately available for private use.
• During the vacancy, the owner still intends to use the property for taxable activities.
• Exploitation costs and vacancy of a mixed-use building are treated differently.
• The court ruled that vacancy does not count as taxable rental days if the property is intended for rental.
• The author suggests that if the exploitation costs apply to all hours, the vacancy should be considered as direct intended use and the costs should be allocated accordingly.
• If there is no direct intended use, the building is still being maintained for business purposes, and the costs should be linked to future intended use, even if it is mixed use.
• The author argues for a clear and consistent approach to the treatment of vacancy for VAT purposes.

Source: taxlive.nl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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