Gross negligence on the part of experienced real estate operator: HR clarifies role of evidentiary presumptions in enforcement of fines
- Background of the Case: X N.V., a real estate management company, incorrectly deducted VAT for goods and services used exclusively for exempt property rentals during a tax audit for 2015 and 2016. The Tax and Customs Administration imposed an additional assessment along with two fines based on this erroneous deduction.
- Court of Appeal Findings: The Court of Appeal of The Hague determined that X N.V. exhibited gross negligence, as the company failed to organize its VAT administration properly despite being an experienced operator in the real estate sector. This negligence justified the imposition of fines under Article 67f and Article 10a of the relevant tax legislation.
- Supreme Court Ruling: The Supreme Court upheld the Court of Appeal’s judgment, affirming that the findings of gross negligence were based on concrete facts, not mere assumptions. It clarified that an experienced taxpayer should understand the prohibition against deducting input VAT on exempt supplies, thus validating the penalties imposed by the Tax and Customs Administration.
Source BTW jurisprudentie
