The Arnhem-Leeuwarden District Court has ruled that the letting of a flat with a parking space constitutes a single transaction for VAT purposes.
One achievement
The court has ruled that the letting of a flat and a parking space to the same tenant must be regarded as a single economic transaction. The right to live in the flat constitutes the defining element of this transaction. The right to use the parking space is closely linked to living in the let flat.
VAT deduction
The case concerns newly built flats. The landlord paid VAT when purchasing the let flat and is attempting to claim a portion of that VAT as a deduction.
The letting of a property is exempt from VAT. However, the letting of a parking space for vehicles is not. If the letting of the parking space were to be regarded as a separate supply, the landlord would be entitled to deduct part of the VAT paid to the seller on the purchase of the flat.
The court has put a stop to this by ruling that the car park is included in the VAT-exempt letting of the flat.