The Supreme Court ruled that the Court of Appeal erred in leaving open the question of whether there was an abuse of rights in this case. The new referring court will still need to address the tax inspector’s argument that an abuse of rights precludes the right to deduct input VAT. The dispute revolves around whether Municipality X can deduct the VAT charged to it in relation to the construction of a building sold to a housing corporation. The Supreme Court found that the Court of Appeal’s conclusion that the amount paid by the corporation to X cannot be considered as consideration for the delivery of the building was incorrect. The contractual provisions between them should guide the levying of VAT, as the parties implemented those provisions.
Source Taxlive
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