- Court Ruling on Short-Stay Exception: The Zeeland-West-Brabant District Court determined that X BV’s rental of the apartments qualifies under the ‘short-stay’ exception, making the rental subject to VAT.
- VAT Refund Entitlement: As a result of this ruling, X BV is entitled to a refund of the VAT on the construction costs of the apartments, which were initially intended for sale but later rented out on a short-stay basis.
- Intent and Competition with Hospitality Sector: The court accepted X BV’s intention to rent the apartments as short-stay accommodations, noting that this rental activity competes with the hotel and holiday sector, thus supporting the validity of the VAT refund claim.
Source Taxlive
- The Zeeland-West-Brabant District Court reviewed an appeal from a real estate company regarding the deduction of input tax for converting a national monument into five short-stay rental apartments, after initially intending to sell them.
- The key issue was whether the rental activities were subject to turnover tax, which would allow for input tax deductions; the court found sufficient evidence to support the company’s original intent to rent to specific groups, such as expats and students, for up to six months.
- Citing relevant case law, the court concluded that the rental activities competed with hotel services and thus fell under a VAT exemption, leading to the annulment of additional tax assessments, approval of refunds, and an award of legal costs to the company.
Source BTW jurisprudentie
Other sources
Short-stay rental apartments subject to VAT; Right to deduct input VAT
- VAT Implications: The rental of fully furnished apartments for up to six months qualifies under the short-stay exception and is subject to VAT, allowing the private limited company (BV) to deduct input VAT on renovation costs.
- Business Decision and Tax Dispute: Initially planning to sell renovated apartments, the BV shifted to renting them out to temporary tenants like expats and students, a move communicated to investors and reported to tax authorities, leading to a dispute over the VAT refund for renovation costs.
- Court Ruling: The court determined that the short-term rentals compete with the hotel industry, concluding that the nature of the service aligns with hotel offerings, thus affirming the VAT applicability and the BV’s right to deduct input VAT on renovations.
Source Taxence
