- The case involves a holding company X, which owns 75% of the shares in F, a company based in Kazakhstan involved in oil exploration.
- The shareholders of X have loaned a total of USD 125 million to X, which X has then loaned to F. F has paid interest but has not repaid any of the loan.
- One of the shareholders of X, B, has charged so-called PCO-fees for operational activities carried out for F. X has paid the amounts invoiced for these fees, but these costs have not been passed on.
- The main point of contention is whether X is a business for VAT purposes.
- The Amsterdam Court of Appeal disagrees with the North Holland District Court, ruling that X is not a business due to the provision of loans to F, as this does not constitute ‘business or commercial’ activity.
- The question then arises whether X owes (transferred) VAT on the PCO-fees under Article 6j, in conjunction with Article 12, paragraph 3, of the VAT Act 1968. The Court rules that the Inspector has not proven that services were provided by B to X in direct connection with the payments, so VAT was wrongly reclaimed.
- The Court also notes that even if it were assumed that services were provided to X, the reverse charge mechanism would not apply.
- The Inspector’s appeal is unfounded, and the Court upholds the District Court’s decision to annul the additional tax assessments.
Source: nlfiscaal.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.
