- The District Court of Gelderland ruled that X cannot fully deduct VAT on asset management costs, as these are not directly related to X’s VAT-taxed consultancy activities and are considered a non-economic activity.
- X’s general costs, which include accountant and office fees, can only have VAT deducted at a pre-pro-rata rate of 50%, as set by the tax inspector, with no evidence provided by X to justify a higher deduction percentage.
- The court emphasized the distinction between economic and non-economic activities in determining VAT deductibility, ultimately finding X’s appeal to be unfounded.
Source Taxlive
No full right to deduct VAT for asset management of securities portfolio
- Limited VAT Deduction for Asset Management: The court ruled that a private limited company (BV) is not entitled to fully deduct input VAT on the asset management of its securities portfolio, as this portfolio does not qualify as a direct, sustainable, and necessary extension of its taxed advisory services.
- Non-Economic Activity Determination: The court found that merely holding a securities portfolio does not constitute an economic activity for VAT purposes, as the BV failed to demonstrate that the portfolio directly supports its advisory services or future economic activities.
- General Costs Deduction Adjustments: For general costs, the inspector applied a 50% pre-pro-rata deduction due to the split between economic and non-economic activities, which the court deemed acceptable. The BV did not provide sufficient evidence to justify a higher deduction percentage, and the additional assessments were upheld.
Source Taxence
