- Sale of Car at Low Price: A holding company sold a car, specifically an Audi RS5 convertible, to its Director-Shareholder (DGA) at an abnormally low price, which led the Tax and Customs Administration to impose an additional VAT assessment, viewing the transaction as an abuse of rights.
- Court Ruling on Abuse of Rights: The Amsterdam Court of Appeal upheld the Tax and Customs Administration’s position, determining that the sale price constituted an artificially low valuation. The court concluded that this practice contravened the objectives of the VAT Directive and the VAT Act, necessitating an adjustment of the taxable amount for VAT to reflect the disguised dividend distribution involved.
- Outcome of the Appeal: The Court of Appeal confirmed the previous ruling by the District Court regarding the additional VAT assessment and fines, affirming that the disguised dividend payment should be included in the compensation for the car sale. Additionally, the court ordered the Tax Inspector to cover the costs of the proceedings.
Source Taxence
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