A tax dispute regarding the deduction of VAT on an incoming invoice was brought before the tax chamber of the court of first instance East Flanders, department Ghent. The dispute centered around the connection required between the incoming and outgoing transaction for VAT deduction. The government granted a taxpayer a concession to operate a catering establishment and car parks on a quay in Temse, but the taxpayer had to construct a pedestrian promenade and green zone as a condition for operation. The administration allowed VAT deduction on costs related to the catering business and car parks, but not on costs related to the pedestrian promenade and green zone. The taxpayer argued that the costs were necessary to generate taxable turnover from the catering business and car parks. The court found that there was an objective connection between the construction of the pedestrian promenade and green zone with the activities subject to VAT, allowing full deduction of VAT. Such tax disputes are part of our office’s core business.
Source Reyns-advocaten
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