The Court of Appeal and the Advocate General of the Supreme Court both ruled that a project developer who sold 77 rented apartments to an investor does not owe VAT on the sales price.
The Court ruled that in this case, the sale qualified as a Transfer Of a Business Going Concern (art. 37d Dutch VAT Act or Art 19 EU VAT Directie). Important was that the project developer entered into rental agreements and service agreements, and it sold the apartments including these agreements (which the purchaser was bound to continue).
“The Advocate General stated that it is not contrary to the purpose of the relevant regulation for a project developer to transfer rented apartments to an investor without VAT, as the Netherlands has not excluded such cases from the rules for the transfer of an undertaking. This facility was introduced to avoid complications in the transfer to VAT-exempt buyers, according to the legislative history from 1967/1968 cited by the AG.”
Source Taxlive
