- Background of the Case: The Tax and Customs Administration assessed additional taxes on a fiscal unity that rented storage boxes, with 57% to 71% of its turnover from exempt rentals to private individuals, raising questions about allowable input tax deductions for mixed-use goods and services.
- Tax Authority’s Position: The Tax and Customs Administration insisted on calculating deductions using the pro rata method based on the ratio of taxed to exempt turnover, arguing that alternative methods lacked objective and accurate data for dividing general costs.
- Court Rulings: Both the District Court and the Amsterdam Court of Appeal ruled against the fiscal unity, stating it failed to provide credible evidence for its proposed square metre method or actual use claims, and the Supreme Court ultimately dismissed the fiscal unity’s appeal, affirming the lower courts’ decisions.
Source BTW jurisprudentie
No Expanded VAT Deduction for Self-Storage Company Based on Floor Area, Court Rules
- A self-storage company did not win a VAT dispute with the tax authorities.
- The company rents storage boxes to both businesses and individuals.
- Businesses are generally charged VAT, while individuals are exempt.
- The company is part of a VAT fiscal unit.
- The company performs activities with and without VAT deduction rights.
- Renovation costs are allocated to specific properties within the fiscal unit.
- Additional costs include renovation services, utilities, and general expenses.
- Tax authorities imposed VAT assessments for 2014 and 2015.
- Refund requests for certain periods in 2019 were denied.
- The company objected to these decisions in court.
- According to regulations, VAT deduction is allowed for goods and services used for deductible activities.
- No deduction is allowed for goods and services used for non-deductible activities.
- For mixed-use goods and services, deduction is proportional to taxable versus exempt revenue.
- The company argued for a higher deduction based on floor space usage.
- The court ruled the company did not prove actual use differed from the revenue-based method.
Source: fiscaalvanmorgen.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.
