Carola van Vilsteren argues that the Tax and Customs Administration and the Supreme Court have a narrow interpretation of the concept of new construction for tax purposes. If an existing building undergoes a major change, it can be considered a new building subject to sales tax, with some exemptions. The criteria for determining if a building is essentially new have changed over time, with the Supreme Court ruling in 2022 that only a change in the architectural structure creates a new building. However, a ruling by the Court of Justice of the EU suggests that the Supreme Court may have been too strict in its interpretation. Van Vilsteren suggests looking at four criteria, including the state of the judiciary, and emphasizes the importance of examining the complex of facts and the structural condition of the building. Tax advisors may need architectural knowledge or a structural engineer and must make calculations to determine what is advantageous for their clients. The relevant laws are art. 15, first paragraph, part a WBRV and art. 11, first paragraph, part a sub 1° OB Act 1968.
Source Taxence
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