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Netherlands: Recovery of VAT on “running costs” of vacant property

Netherlands: Recovery of VAT on “running costs”

The Supreme Court (Hoge Raad) in a 26 June 2020 decision held that value added tax (VAT) on “running costs” (instandhoudingskosten) for a vacant office building is deductible, even if the owner cannot prove an intention to lease out the property that is subject to VAT.


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According to the Supreme Court, depending on the nature of the property, the owner does not always have to prove an intention to lease out the property. Rather, in certain instances, it must be assumed that the entrepreneur’s intention is to lease the property and includes an intention to take advantage of the possibility to lease out the part of the property subject to VAT.

Read a July 2020 report prepared by the KPMG member firm in the Netherlands

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