Deductibility of VAT on renovation costs for rented holiday home to director

• A holding company rents a villa to its director for €6,000 per month for one year.
• The holding company renovates the villa and claims VAT deduction on the renovation and furnishing costs.
• The holding company argues that the rental falls under the short-stay exception, making it subject to VAT and allowing for VAT deduction.
• The court determines that the rental does not qualify for the short-stay exception under the law and previous rulings.
• However, the court finds that the rental does qualify for the short-stay exception under the Vastgoedbesluit (Real Estate Decree).
• The Vastgoedbesluit states that the duration of the actual stay is decisive for VAT consequences when the tenant does not move their social life to the holiday home.
• The rental contract lasted for one year, and the director stayed in the villa for 32 days.
• The court concludes that, based on the interpretation of the Vastgoedbesluit, the rental qualifies as “short stay.”
• Therefore, the holding company is entitled to VAT deduction.

Source: fiscount.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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