- The Northern Netherlands District Court has ruled that Partnership X, with size 1 and size 2, will continue the dairy farming of Partnership 2 starting from December 19, 2017.
- Partnership 2 consists of father A and his sons, including partner 1. On January 6, 2016, Y supplied a dairy farm, along with various immovable properties, to father A. This supply was exempt from VAT.
- Father A made the immovable property available to Partnership 2 free of charge until December 19, 2017, and then to Partnership X also free of charge.
- Until January 1, 2018, X’s services are exempt from VAT due to the agricultural scheme.
- From January 1, 2018, X’s services are subject to VAT. Transferor Y did not apply the agricultural scheme and used the immovable property for VAT-taxable activities until January 6, 2016, deducting the VAT on the property.
- In 2019, Y reviews the VAT deduction previously enjoyed on the immovable property for the remaining review period from 2016.
- The court determines that the immovable property was first transferred and used by Partnership 2 and then by Partnership X. The court rules that transferor Y used the goods for VAT-taxable activities and because X uses the goods for VAT-taxable supplies from January 1, 2018, X cannot revise the VAT. X’s appeals to neutrality and trust are unsuccessful. However, X is entitled to non-pecuniary damages. X’s appeal is dismissed.
Source Taxlive
