- Private-equity fund X CV is not a VAT entrepreneur and therefore not entitled to deduct input VAT.
- X CV’s activities consist of making investments via acquisition of majority interests in companies indirectly through specially established companies (BidCos).
- The aim of acquiring a target is to sell it at a profit in the long term.
- Before X CV decides to acquire a target, it has various external advisory services performed.
- The invoices for the external advisory services are addressed to and paid by X CV.
- The contracts underlying the external advisory services are signed on behalf of the (indirect) shareholder of X CV.
- X CV claims deduction of the input VAT on the external advisory costs.
- The Court of Amsterdam rules that private-equity fund X CV does not qualify as a VAT entrepreneur and therefore has no right to deduct input VAT.
- X CV does not demonstrate that it incurred costs with the aim of providing services for remuneration to the BidCos.
- It also does not demonstrate that the costs are caused by and relate to its economic activity in general.
- The reference to the agreements concluded in 2018 cannot benefit X CV, because the deduction of input VAT in dispute concerns the year 2017.
- They cannot therefore serve as evidence for its claim that it provided services for remuneration in 2017 and is therefore a VAT entrepreneur.
- The Court of Appeal confirms the judgment of the District Court.
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.
