North Holland District Court rules that dividing a car qualifies as an abuse of right.
Earlier this year we wrote about a ruling in which Zeeland-West Brabant District Court concluded that dividing a car no constitutes an abuse of right. You can read how dividing a car works in that article: Divided car not an abuse of right.
Conditions
This naturally makes one curious on the basis of which circumstances the North Holland District Court did reach the opinion that there was an abuse of rights. Especially important is the short time between the BV's purchase of the car and its resale to the director-shareholder. The car was taken into use by the BV on 19 November 2014 and was subsequently resold on 6 January 2015. In addition, the Court considers that the BV also bought (expensive) cars in 2017 and 2018/2019 and resold them to its director-shareholder within a short period of time (see also below).
The case before Zeeland-West Brabant District Court involved a car bought by the BV on 29 December 2015 and resold to the director-shareholder on 29 December 2020.
Fine
The North Holland District Court did set aside the penalty imposed by the tax authorities. By ruling that there had been an abuse of rights, the interested party had taken a pleading position, which meant that there was no gross misconduct required for the imposition of an offence penalty.
2017
In a ruling issued on the same date, the North Holland District Court also on the car sold to the director-shareholder in 2017. However, the registration number of that car was never registered in the BV's name and the BV never used the car (the car remained with the seller until it was delivered to the director-shareholder). As a result, the Court did not reach the doctrine of abuse of rights, but ruled that the BV was not the buyer of the car and was therefore not entitled to deduct the VAT charged in respect of the delivery.
In this case, the penalty for non-compliance is upheld. There is no pleading position. The Court did reduce the fine from 50% to 25% of the VAT collected from the BV, but this reduction was caused by the (excessive) duration of the proceedings.