VAT on the construction and furnishing of the care complex is fully deductible

Entitlement to VAT Deduction: The Court of Appeal of ‘s-Hertogenbosch ruled that X BV is entitled to deduct VAT on all costs charged to it, affirming that these costs were incurred for the construction and furnishing of a care complex intended for dementia patients.
Business Model Justification: The court highlighted that the collaboration between X BV, its affiliated company B BV, and the investor creates a credible business model. X BV’s role in the realization of the care complex and B BV’s responsibility for renting apartments and maintaining common areas were clearly defined, indicating no abuse of rights in the arrangement.
Successful Appeal: The court found X BV’s appeal well-founded, overturning the tax inspector’s rejection of the VAT deduction for the first quarter of 2020 and the reduced refund for the second quarter, thereby supporting X BV’s claim for full VAT recovery on the related expenses.

Source Taxlive