The Advocate General (A-G) to the Supreme Court has issued a conclusion issued in a case about dividing cars.
Dividends
“Distributing a car” refers to the BV selling the car to its director-major shareholder at a (much) lower price than the economic value of the car. For income tax purposes, this leads to a taxable distribution of profits (hidden dividend), but VAT is only paid on the (low) purchase price received (obviously taking into account the residual BPM), thus realising an (often substantial) VAT advantage.
Onerous title
In the cassation case, the Ministry of Finance argues that the sale of a car at a much lower price than the car's economic value is not a supply for consideration. The A-G agrees. As a result, VAT is not paid on the price received for the car, but the taxable amount for VAT is equal to the economic value of the car.
Abuse of law
Another argument of the Ministry of Finance is that selling the car at too low a price qualifies as an abuse of rights. The court and court ruled that this requires a combination of legal acts, whereas in the case of dividing, there is only one legal act: the sale of the car.
The A-G agrees with the ministry that an abuse of right does not require the existence of a combination of legal acts. The A-G also concludes that applying an abnormally low fee can lead to an abuse of right.
Of course, we have to wait and see whether the Supreme Court in its judgment will follow the A-G's conclusions.