- X BV, a company with diverse business activities, sought to deduct input VAT of €5,040 related to legal expenses incurred for its director-major shareholder (DGA), Z, which was subsequently denied by the tax inspector.
- The District Court of The Hague ruled that X BV was not entitled to the input tax deduction because it failed to demonstrate that the legal assistance primarily related to its business activities, rather than to Z’s personal criminal, civil, and tax issues.
- The Court emphasized that X BV did not provide sufficient evidence or explanation regarding which activities concerned its business or how the invoices were paid and settled, thereby failing to meet the burden of proof under Article 15 of the VAT Act 1968, and thus declared the appeal unfounded.
Source Taxlive
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