- A municipality (X) was denied the deduction of VAT on school renovation costs, despite acting as the contractor and engaging in an economic activity, because the court found it constituted an “abuse of rights.”
- The municipality initially agreed to contribute to Stichting A’s school renovation and then contracted the work to a third party, attempting to deduct the input VAT.
- The court determined that the arrangement was an artificial construction primarily designed to gain a tax advantage, as Stichting A would not have been able to deduct the VAT if it had directly commissioned the renovation.
Source Taxlive
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