Dutch Court Denies VAT Deduction for Flower Stall’s Mixed-Use Expenses

• A and his spouse B ran a flower stall through their partnership, vof X
• After an audit, the tax inspector denied the deduction of VAT on costs for energy, internet, and phone used in their private home for administration, the rent of a warehouse, and the market stall, and for services provided by A’s son
• X appealed the VAT reassessment for 2016 amounting to 7,940 euros but was unsuccessful in courts including Rechtbank Gelderland and Hof Arnhem Leeuwarden
• The courts found X did not prove the expenses were business-related and that half of the mixed-use expenses (energy, phone, internet) were attributable to taxable activities
• The deduction for the warehouse rent was also rightly denied as the invoices showed a landlord with a mailbox in Spain who was untraceable and not the owner of the warehouse in 2016
• No rental agreement was provided for the warehouse and there was no evidence of opting for taxable rent
• Regarding A’s son’s services, the court believed he did work for X but it was not proven that he acted as an entrepreneur given his age (15 in 2016) and his student status, questioning his independence in the work

Source: futd.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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