In a recent case, the Dutch Court of Appeals upheld the tax authority’s decision to impose additional VAT assessments and penalties on a company that engaged in real estate exploitation and provided loans to other companies. The court found that the company had incorrectly calculated its deductible VAT and had not taken into account the proportion of exempt activities. The court ruled that the VAT deduction should be determined based on the proportion of taxable activities, except for interest income from loans, bank deposits, and current accounts, which are considered consideration for exempt lending activities. The court also stated that the company could not rely on the banking resolution policy as it only applies to banks.
Source: taxence.nl
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