Dutch Court upholds corrections: Company’s payments deemed non-business expenses and VAT deductions disallowed

• The main issue in this case is whether payments made by the company to other entities were legitimate business expenses with corresponding services rendered, or if they were improper payments without any real services provided.
• The court examined evidence from criminal investigations, tax audits, and statements from various parties involved and concluded that for the payments made, no actual services or work were provided in return.
• The company’s explanations were found to be inconsistent and not supported by concrete evidence and the court rejected the company’s claims about oral agreements, lump sum payments, and software development investments, finding them implausible given the lack of documentation and conflicting statements.
• The court ruled that the company is not entitled to deduct input VAT for these payments since no actual services were rendered.
• The court emphasized that the burden of proof for claiming VAT deductions lies with the taxpayer, and in this case, the company failed to meet that burden.

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.

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