The dispute revolves around the interpretation of Article 11, first paragraph, section a, sub-section 1o, of the Dutch Turnover Tax Act 1968, which stipulates the exemption of turnover tax for the supply of immovable property and the associated rights, with exceptions. The exceptions include the supply of a building or part thereof and its accompanying land within two years of first use, as well as the supply of building land.
The main question is whether the sale of a parcel should be considered as a single transaction (Inspector’s position) or as multiple (two) transactions (taxpayer’s position).
According to established jurisprudence of the Court of Justice of the European Union (CJEU), each transaction for turnover tax purposes should normally be considered distinct and independent. However, if the actions are so closely linked that they objectively form a single, indivisible economic transaction, it would be artificial to separate them.
The CJEU further states that there is a single transaction for turnover tax if certain elements are considered the main transaction and others are deemed ancillary transactions (absorption). Ancillary elements share the tax fate of the main transaction and are considered such when they serve as a means for the customer to make optimal use of the main transaction.
In this case, the court determines that the sale of each parcel individually qualifies as a single transaction, subject to one turnover tax regime. Each parcel is one immovable property sold by one seller to one buyer at one price in one deed of transfer. The court emphasizes that it was not possible to purchase only the building area or only the natural area; both components had to be bought together. The acquisition of the natural area is not a goal in itself for the buyer, as there were no interested parties for the separate purchase of land with only a natural designation. The court concludes that the natural area is incidental to the main transaction, optimizing the residential use. Therefore, the sale of a parcel is considered one transaction for turnover tax purposes, and it is agreed that the correct amount of turnover tax has been paid.
In conclusion, the appeal is deemed unfounded based on the above considerations.
Source: uitspraken.rechtspraak.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.
