Foundation A aims to promote the creation of cultural activities in which it focuses in particular on an audience with a multicultural background. In that context, A annually organizes a free music festival. There is also an information market on the festival site for which A leases the necessary stands. A also provides the distribution of food and drinks.
A’s income consists of a subsidy from the municipality, catering turnover, leases and sponsor contributions. The VAT-taxed part of the revenue, which relates to the last three activities, amounts to 14% in 2003, 10% in 2004, 19% in 2005 and 19% in 2006.
The question is to what extent A is entitled to deduct input tax.
Source BTW jurisprudentie