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24 June 2019 / news

Earlier entitlement to deduction does not prevent reclaiming VAT at time of sale

According to the Court of Appeal the right to deduct VAT does not have to be exercised at the time of the designation of the use of costs. This right to deduct VAT may still be exercised at the time of actual use.

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Issue of law and interest

An interested party bought land with the intention of developing it and selling static caravans. Despite the fact that this intended use entails the right to deduct VAT, the interested party did not deduct the VAT. The development did not take place, and the owner sold two plots to the operator of the park, whereby the purchase price was increased with VAT. In dispute is whether the owner may still reclaim the VAT on the purchase, since the actual use does not deviate from the earlier intended use of the property, in case the seller did not previously exercise the right to deduct.


According to Arnhem-Leeuwarden Court of Appeal, the owner can reclaim the VAT charged at the time of purchase in the year in which the plots are taken into use (i.e., at the time of sale). According to the Court of Appeal, sufficient clarity about the nature of the actual use only arises in that year. This does not require that the actual use deviates from the intended use. Since the owner sold the plots with VAT, the VAT on the acquisition of these plots is still fully deductible.

Practical interest

In this judgment the Court of Appeal follows the literal text of the law which states that at the time a good or service is taken into use, a correction should be made for the VAT that has previously been (actually) deducted. In our opinion, this is a correct judgment. Therefore, if it is still unclear at the time of purchase what the intended use is, the purchaser has a ‘second chance’ to correctly determine the VAT deduction at the time the property is first taken into use.


If you have any further questions on this issue or would like to receive more information, please contact Jérôme Germann or your trusted adviser at the Loyens & Loeff Real Estate Tax Team.

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