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ABB tax assessments correctly imposed on X nv for construction of hotel on Bonaire, right to deduct

  • The High Court rules that the ABB assessments were correctly imposed on X nv in relation to the construction of the hotel.
  • X nv is considered an entrepreneur and is entitled to deduct ABB invoiced by subcontractors at the 6% rate.
  • X nv was established in 2015 for the construction of a hotel in Bonaire, with Y nv as the client.
  • X nv mainly uses subcontractors for the construction work.
  • After completing the hotel, X nv invoices Y nv without charging General Consumption Tax.
  • The tax inspector imposes ABB assessments on X nv after a tax audit, taking into account input tax.
  • X nv disagrees, arguing that it cannot be considered an “entrepreneur” or “producer” under ABB regulations.
  • The Common Court of Justice of Aruba, Curaçao, Sint Maarten, Bonaire, Sint Eustatius, and Saba rules that the ABB assessments were correctly imposed on X nv as it is an entrepreneur.
  • X nv appeals to the Supreme Court, claiming the right to deduct input tax.
  • The Supreme Court confirms that the ABB assessments were correctly imposed on X nv for the hotel construction.
  • X nv is entitled to deduct ABB invoiced by subcontractors at the 6% rate, even if the correct rate should have been 8% for goods.
  • The Supreme Court reduces the assessments by $382,237 and $6,199.

Source: taxlive.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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