Renting out office space in a home to a private limited company leads to a VAT deduction

The Amsterdam Court of Appeal determined that X and Y’s rental of office space in their home to A BV constitutes an economic activity, allowing them to jointly qualify as entrepreneurs eligible for an additional VAT refund.
X, a director and indirect sole shareholder of A BV, and Y purchased a house, with VAT charged on the delivery; they subsequently entered a VAT-taxed rental agreement to provide office space for A BV, despite the office’s limited facilities and access.
The court ruled that the connection between the costs of acquiring the dwelling and the provision of office space supports the right to deduct input tax, affirming that the intention to rent the office at the time of house transfer suffices for VAT deduction eligibility.

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