The case involves a national equestrian organization called “X” based in Qatar but operating in the Netherlands. X aims to develop various equestrian disciplines, train top riders, and improve equestrian infrastructure in Qatar. Their main income comes from payments by the “Y” committee, which promotes sports and physical recreation in Qatar. X also has other revenue sources. They own an arena in Qatar where they host events for show jumping horses and manage on-site properties, including accommodations, shops, and restaurants. They provide training and education through their “future riding” school and have a team of riders trained in the Netherlands.
In 2017, X imported a valuable horse into the Netherlands for training and recovery due to an injury. The Tax and Customs Administration issued a VAT payment invitation to X for the import VAT. X requested a refund, claiming the horse was used for activities outside the Netherlands with potential VAT deduction rights. The tax inspector rejected the claim, arguing that the horse was primarily purchased to qualify for the Olympics, not for a genuine economic activity. X appealed, but the court upheld the rejection, as X failed to provide sufficient evidence of their economic activities and the link between the horse and taxable activities. The court also noted that most of X’s income came from payments by the Y committee, making it unclear whether the claimed VAT deduction would apply if X’s activities were solely conducted in the Netherlands. The court ruled that the denial of VAT deduction for the imported horse was justified, but X was entitled to compensation for excessive processing time. The court dismissed X’s appeal.
Source: FUTD
