Uitzendbureau BV X provided foreign temporary workers to its clients. These workers were employed at specific workplaces for a certain period but resided in the EU. The workplaces were often far from their residences (usually over 500 km away). X arranged temporary accommodations near the workplaces for these workers, collaborating with bungalow parks and bed & breakfasts. X did not charge the workers for housing. X claimed VAT deductions on the VAT charged by the accommodation providers in their VAT returns for 2012 to 2015.
The Court of Appeal referred to a Supreme Court ruling from November 13, 2020, which determined that the choice to use accommodation rented by the employer when entering into an employment contract was generally a personal choice of the individual signing the contract. The Court of Appeal found it unlikely that X was under specific circumstances forcing them to provide accommodations to their foreign temporary workers. Moreover, the submitted evidence did not indicate that renting accommodations was primarily driven by X’s unique needs. X had not adequately demonstrated that they made sufficient efforts to find Dutch workers. The Court of Appeal concluded that the VAT deduction was indeed disallowed by Article 1, paragraph 1, letter c of the BUA.
The Court of Appeal dismissed X’s argument that restricting VAT deduction based on the BUA violated the principle of equality, referencing the tax authority’s allowance of VAT deduction on hotel stays for staff attending conferences, courses, or visiting clients located relatively far from their residences. X had not presented specific cases where the tax authority allowed VAT deduction on such hotel stays. Even if there were comparable cases, X had not substantiated any preferential policy, intention of favoritism, or compliance with the so-called majority rule in this context. Therefore, the Court of Appeal ruled in favor of the tax inspector in their appeal.
Source: FUTD
