The Supreme Court ruled that the VAT refund granted by the Court of Appeal was too high because they incorrectly considered the rental property and the solar panels as separate capital goods for determining the deductible part of VAT. X has two houses on a plot, one for personal use and one for rental. The rental property is rented without VAT. X argued that the VAT for the rental property’s roof is deductible, but the inspector disagreed, only allowing a deduction for the solar panels’ VAT. The Court of Appeal ruled that the rental property was not solely for personal use, so X is entitled to deduct input tax on the roof using a pro-rata approach. The Supreme Court disagreed, stating that for VAT purposes, the rental property and solar panels are a single capital good. Therefore, X is entitled to deduct input VAT in proportion to the total payments for transactions in respect of which VAT is deductible.
Source Taxlive
Latest Posts in "Netherlands"
- Adjustment of VAT deduction for services on immovable property: What can you still do?
- Government Responds to Questions on VAT Increase Impact Analysis for Accommodation
- Heijnen Maintains VAT Increase on Accommodation Despite Predicted Revenue Loss
- VAT due to number acquisition not deductible due to participation in fraud
- Dutch Government Responds to Questions on Reduced VAT for Culture Media Sports
