Real Estate

Amendment of VAT policy statement: broader application of asset management exemption

On November 2, 2021, the updated Specific State Supervision Policy Statement of the Deputy Minister of Finance was published. The updating of the original policy statement was necessary due to Supreme Court case law, which entailed a broader interpretation of specific state supervision than that in the earlier policy statement.

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Without own staff, no fixed establishment for VAT purposes in the case of let property

On June 3, 2021 the Court of Justice of the European Union (‘CJEU’) rendered judgment in the Titanium Ltd case (case no. C-931/19). The CJEU ruled that a foreign taxable person that does not have its own staff in situ in a Member State cannot have a fixed establishment for VAT purposes in that Member State either.

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Also the acquisition of only the legal ownership of shares in real estate legal entities is subject to real estate transfer tax

The Supreme Court based its conclusion on a formal interpretation of the term ‘interest’ in the Legal Transactions Taxation Act and thus ruled differently to the Court of Appeals ‘s-Hertogenbosch, which, on January 24, 2020, had accorded an economic meaning to the term ‘interest’.

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New questions to CJEU: towards a broader concept of fixed establishment for VAT purposes?

A Romanian Court recently sought a preliminary ruling from the Court of Justice of the European Union (‘CJEU”) about the concept of fixed establishment for VAT purposes in the Berlin Chemie case (C-333/20). This case again shows that the concept of fixed establishment for VAT purposes is evolving.

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CJEU in A Oy case: co-location services do not constitute the leasing of immovable property, nor any other immovable property service

On July 2, 2020 the Court of Justice of the European Union (‘CJEU’) rendered judgment in the A Oy case (C-215/19). The case concerned whether co-location services must be regarded as the leasing of immovable property or as another immovable property service. In many EU Member States the VAT treatment of co-location services is not uniform and this judgment thus provides practical guidance.

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Possibility to recover VAT on running costs for vacant property extended

On June 26, 2020 the Supreme Court ruled that the VAT on running costs (‘instandhoudingskosten’) for a vacant office building is deductible, even if the owner cannot prove, on the basis of objective information, their intention to lease out the property subject to VAT. This judgment has an important outcome for the real estate practice.

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Transfer of (short-term) leased building by a developer not a transfer of a going concern for VAT purposes

In its judgment of May 15, 2020, the Supreme Court upheld the decision by the Court of Appeals. The building in question was leased on a VAT-exempt basis. As a result of this judgment, parties will be confronted with a higher amount of non-recoverable VAT.

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New preliminary ruling question about the ‘fixed establishment’ concept for VAT purposes

On December 20, 2019 the Austrian Bundesfinanzgericht asked the Court of Justice of the European Union for a preliminary ruling on the concept of a ‘fixed establishment’ in the Titanium Ltd case (C-931/19). The case is not only relevant for property letting companies, but potentially also for all VAT taxable persons with foreign activities, as it may provide a more detailed interpretation of the EU concept of fixed establishment.

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VAT recovery based on actual use permitted for bank

On March 27, 2020 the Court of Appeals Den Bosch rendered an interesting judgment about the recovery of VAT in a case concerning a financial institution. The Court ruled that the bank’s ‘actual use method’ had been sufficiently substantiated.

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