- Court ruling on VAT deduction: The District Court of Gelderland held that X BV failed to prove that contractor A BV’s invoices related to the construction of two apartments. Therefore, X BV cannot deduct VAT on construction periods for those apartments.
- Reason for denial: Separate building contracts with Mr and Mrs D and Mr F meant A BV delivered to three different customers. The costs charged to X BV only pertain to spaces rented to the childcare/after-school care facility, which is VAT-exempt.
- Impact on assessments: VAT on land acquisition, development, and general project costs remains deductible based on actual use (gross floor area). Consequently, the 2017 assessment is reduced, 2018 annulled, and 2019 upheld. X BV’s appeal is partially successful.
Source Taxlive
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