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Classifying a Residence as Business Asset for VAT Deduction: Case Study

  • A VAT entrepreneur can designate their mixed-use home as VAT business property if they partially deduct VAT in their first VAT return.
  • A man requested a VAT refund for the construction of his home, including the costs of the roof.
  • The tax authorities later issued a reassessment for a portion of the refund related to the roof construction.
  • The dispute reached the Court of Appeal, where it was agreed that the man had timely requested the VAT refund.
  • The question was whether the man had designated the home as business property in a timely manner.
  • The Court ruled that the man had made the designation by partially deducting VAT on the construction of the home in his refund request.
  • The Court also determined that the man had made the designation in a timely manner, as he had the option to do so in the VAT return for the period in which he started using the property.
  • Therefore, the reassessment was rightfully overturned by the lower court.


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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