- Notariskantoor BV X had a third-party account with large amounts due to its commercial real estate practice
- The company received interest payments on the account in 2011, 2012, and 2013
- BV X deducted all input tax on general expenses, but the inspector imposed penalties for incorrect deductions
- BV X appealed, arguing that interest amounts should not be considered in calculating deductible input tax
- The Court of North Holland rejected the appeal and maintained the penalties, but reduced them by 20% due to undue delay
- The Amsterdam Court agreed with the lower court and rejected BV X’s argument that the interest was outside the scope of VAT
- The Court ruled that holding funds at a bank for interest was within the scope of VAT if done by a taxable person acting as such
- BV X met this condition as a notary and entrepreneur for VAT purposes
- The Court also rejected BV X’s appeal based on Article 174, paragraph 2, part b, of the VAT Directive 2006
- The Court ruled that the extension income could never be considered as incidental financial transactions
- The EU Court confirmed the extension concept in later cases (NCC and Mercedes Benz Italia)
- The Amsterdam Court rejected BV X’s appeal based on the neutrality principle
- The Court declared BV X’s appeal partially successful as the inspector dropped the penalty during the hearing.
Source: futd.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.
