Dutch lowest court rules that a private equity investment fund is not entitled to the recovery of VAT on transaction costs

A Dutch court has ruled that a private equity investment fund cannot recover VAT on transaction costs.
The investment fund, set up as a limited partnership, was deemed not to qualify as a VAT entrepreneur by the Dutch tax authorities.
The court ruled that the investment fund was the recipient of the preparatory work performed by third parties and that there was no direct link between the costs and activities of the investment fund.
While providing transaction documentation against consideration qualifies as an economic activity, it cannot be placed on the same footing as the preparatory work obtained by the investment fund, said the court.