Court of Amsterdam Ruling: VAT Deduction on Legal Fees for CEO’s Criminal Case?

• The case involves a dispute over the deduction of VAT on invoices for legal assistance to the CEO in a criminal case.
• Both the company and its CEO are suspected of criminal offenses, leading to a criminal investigation.
• The company deducted VAT from invoices for its own legal representation, which is not disputed.
• The company also deducted VAT from invoices for the CEO’s legal representation, which the tax inspector corrected or denied.
• It is agreed that the company is an entrepreneur with full right to deduct input tax, but the costs in question are not direct business expenses.
• The court considers whether the services were provided under a legal relationship with the service providers.
• It is agreed that the services were provided under a legal relationship between the company and the CEO’s legal firm, and the company is the recipient of these services.
• The court will determine if the VAT on these invoices can be deducted as part of general business costs under the relevant tax law.

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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