The Zeeland-West-Brabant court has ruled that a lump sum payment received by a tenant for terminating a lease of business premises is subject to VAT if the rental agreement was VAT-taxed. In a case where an entrepreneur entered into a rental agreement with VAT-taxed rental, and later agreed with the landlord to terminate the agreement for a lump sum payment of €250,000, the court found that the payment was compensation for a service provided and therefore subject to VAT. The court also rejected the entrepreneur’s objection to the default fine imposed by the Tax Authorities, as there was no arguable position and no evidence of avas, but reduced the fine due to exceeding the reasonable period.
Source Taxence
