Dutch Court Denies VAT Deduction Claim Due to Lack of Economic Activity

• Rechtbank Noord-Holland ruled on a case involving VAT tax deduction claims
• The claimant sought to deduct input VAT but failed to prove he conducted economic activities
• According to Dutch law, only entrepreneurs can claim input VAT deductions
• The claimant needed to provide proper invoices and prove his entrepreneurship since no turnover was declared since 2008
• Entrepreneurship is defined as independently operating a business which involves economic activities
• Economic activities include actions of manufacturers, traders, service providers, and professionals
• These activities must involve taxable transactions that result in performance under consideration
• Services must be exchanged for a payment that directly corresponds to the service provided
• The claimant did not receive or invoice any payments for his activities from 2008 to 2020
• He mentioned targeting a specific audience but had no actual customers to bill
• The court found no legal relationship involving exchange of services for payment
• The claimant’s mention of receiving money through websites was deemed insufficient proof of providing individualizable services
• The court concluded there was no basis for VAT deduction and dismissed the appeal as unfounded

Source: uitspraken.rechtspraak.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.

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