VAT on residential rent by foreign temporary workers not deductible

VAT on residential rent by foreign temporary workers not deductible (art. 81 RO Act)

• Court of Appeal Ruling: The Court of Appeal of ‘s-Hertogenbosch determined that X BV improperly deducted VAT related to the accommodation provided to foreign temporary workers, finding no credible special circumstances necessitating this arrangement.
• Insufficient Justification for VAT Deduction: The Court concluded that X BV’s claims regarding special circumstances were too vague and indirect, aligning with the inspector’s view that the VAT deduction was not justified under Article 1(1)(c) of the BUA.
• Supreme Court Decision: The Supreme Court dismissed the appeal in cassation without further justification, affirming the lower court’s ruling that X BV could not claim the VAT deduction for the housing of its foreign workers.

Source Taxlive

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No VAT Deduction for Housing Foreign Temporary Workers: Supreme Court Upholds Tax Authority’s Correction

• X, a temp agency, provided foreign workers to clients and rented accommodations for them, covering the rent and deducting VAT.
• The tax inspector denied the VAT deduction based on specific legal provisions and issued an additional tax assessment.
• The lower court annulled the assessment, but the Court of Appeal overturned this, ruling X did not prove special circumstances necessitated providing housing.
• X’s arguments and evidence were insufficient; the housing was not primarily due to X’s special needs.
• The Supreme Court dismissed X’s appeal, upholding the correction of the VAT deduction.

Source: nlfiscaal.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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