In our article Which expenses are business-related? We recently outlined the rules used to assess whether expenses incurred by business owners can be classified as (sufficiently) business-related, and therefore deductible from profits.
Before the Court of Appeal in Den Bosch, an entrepreneur (a director and sole shareholder) recently demonstrated that, in his specific circumstances, the costs of a German hunting lease had rightly been charged to the profits of the private limited company. The private limited company ran a hotel with a (game) restaurant, and hunting was used to attract clients and maintain existing business relationships. The game shot was sold in the restaurant. The court also took into account that the director and major shareholder held a separate hunting licence for which he bore the costs himself. The fact that the German hunting lease was in the director and major shareholder’s name did not detract from the business-related nature of the costs, as such licences can only be held in the name of a natural person.
The same proceedings also concerned the deductibility of the costs of a night-vision device. The director and major shareholder argued that this had been used for the security of the business. However, the court found that the binoculars were not permitted to be exposed to daylight or artificial light, and that the company’s premises were surrounded by artificial lighting at night. The claim for the deduction of these costs was therefore not upheld.