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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.

Source: taxence.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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