- The Dutch Supreme Court ruled that a plot of land with a retaining wall is considered undeveloped for VAT purposes.
- The qualification of land as developed or undeveloped is important for VAT purposes.
- Developed land is usually VAT-exempt, while undeveloped land may be subject to VAT.
- The lower courts had previously considered the land as developed because it couldn’t exist without the retaining wall.
- The Supreme Court determined that the wall was negligible compared to the undeveloped part of the land.
- The entire plot was therefore considered undeveloped land.
- The analysis involved assessing if the land was linked to the building and if the building was negligible compared to the undeveloped part.
- If a plot cannot be divided artificially, it may be treated differently for VAT purposes.
- If undeveloped land is intended to be developed, it is subject to VAT and exempt from real estate transfer tax.
Source:
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.
