X BV, a personal holding company owned by its director-major shareholder (DGA), A, purchased a property in 2020. The property was subsequently renovated and rented to the DGA. Between September 1, 2021, and August 31, 2022, the DGA used the property for 32 days.
Initially, the tax inspector argued that X BV was not entitled to a VAT deduction because the rental agreement exceeded six months. However, the Gelderland District Court ruled in favor of X BV, accepting their reliance on the Real Estate Decree.
The Court of Appeal upheld this decision, acknowledging that while the rental, according to the letter of the law, does not fall under the short-stay exception, it does qualify based on the Real Estate Decree. The court concluded that X BV was justified in trusting the explanation of the short-stay exception provided in the Real Estate Decree. This means the rental is considered VAT-taxed, entitling X BV to the deduction of input tax.
Source: taxlive.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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