No VAT Deduction Allowed for Private Purchases; Municipality Entitled to VAT on Invoiced Amounts

• A municipal official abused his position by orchestrating private purchases through suppliers, having invoices routed via a third party (the taxpayer) and then billed to the municipality with a profit margin.
• The court ruled that the official, not the taxpayer, was the actual purchaser, and the taxpayer cannot be considered a commission agent under Dutch VAT law.
• The taxpayer is not entitled to deduct input VAT from the suppliers’ invoices and remains liable for the VAT invoiced to the municipality.
• This results in a significant financial burden for the taxpayer, who faces what is perceived as double taxation, and the municipality is also seeking civil damages for the wrongly invoiced amounts.
• The court suggests the tax inspector consider offsetting any damages paid by the taxpayer to the municipality against the additional VAT assessment to prevent unjust enrichment.

Source: uitspraken.rechtspraak.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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