Sale of Building Plots Is a VAT-Taxable Business Activity, Not a Private Transaction, Court Rules

VAT entrepreneurship when selling building plots from private assets: active steps decisive

• A, a VAT-registered real estate renter, acquired an estate in 2007, demolished houses, and took extensive active steps to prepare four building plots for sale, including zoning changes, soil research, infrastructure development, and utility connections.
• In 2019, A sold two plots, initially paying VAT, but later disputed his VAT entrepreneur status, claiming the sale was from private assets and not subject to VAT, while the Tax Authorities maintained it was a taxable supply by a VAT entrepreneur.
• The Amsterdam Court of Appeal ruled in favor of the Tax Authorities, citing CJEU case law that active preparatory and development actions, like A’s, transform a private sale into a taxable supply by a VAT entrepreneur, regardless of the incidental nature of the sale.

Source BTW Jurisprudentie

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• The sale of building plots by X was considered a VAT-taxable business activity, not a private transaction.
• X undertook active steps (demolition, development, sale) similar to those of a business, not just private asset management.
• Both the lower court and the Amsterdam Court of Appeal ruled that X acted as an entrepreneur for VAT purposes.
• X’s appeal was dismissed; the court’s decision was upheld.

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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