- The Hague District Court held that VAT on legal fees incurred in criminal investigations is deductible pro rata, because the costs relate to the company’s general economic activities.
- A multinational parent company incurred over €294 million in legal and advisory costs from 2016–2019 after investigations into bribery and corruption.
- The tax inspector argued part of the costs was directly linked to prohibited acts and denied input VAT, issuing assessments.
- The court found no sufficient proof that the legal services were directly and immediately connected to absolutely prohibited activities; the services were used to continue the group’s business, and support for employees was mainly in the company’s interest.
- As a result, the VAT was recoverable pro rata and the additional assessments and penalties were annulled.
Source: taxence.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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