- The Hague Court in the Netherlands ruled on October 13, 2023, that X has the right to deduct input tax for the conversion of office space into flexible offices.
- X agreed with group A to jointly renovate the building they are located in and rent out the resulting flexible offices.
- X provided labor and advice for the renovation and believed they had the right to deduct sales tax listed on invoices from A Finance bv.
- The tax inspector argued that it was unclear what work had been done and whether X’s services were used for deductible performances, and imposed a back tax for the fourth quarter of 2018.
- X appealed the decision.
- The Hague Court ruled differently from the lower court, stating that X has the right to deduct input tax on A’s invoices.
- Despite the exact tasks of both X and A not being clear from the invoices and agreement, the court found it plausible that X contributed to the renovation by providing labor and paying the invoices, thus meeting the material requirements for the right to deduct.
- The court ruled that X’s later withdrawal did not affect this right.
- The inspector’s claim in the appeal that the flexible offices would not be used for VAT-taxable rental also failed.
- X’s appeal was upheld.
- The ruling is based on the VAT Act 1968 15.
Source: taxlive.nl
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
