Since 2016, a business owner has been renting a number of commercial premises within a building. The landlord charges VAT on the basis of an agreement regarding taxable lettings. Shortly afterwards, the business owner begins subletting parts of the building to third parties. In these subletting arrangements, the tenancy agreements explicitly state that no VAT is charged on the rent. In 2017, a new accountant advised the entrepreneur to charge VAT on the subletting after all. The business owner informs his subtenants by email that VAT will be charged from 1 July 2017. However, this change is not set out in new tenancy agreements. <\/p>\n
In 2021, the Tax and Customs Administration will launch an audit of the entrepreneur\u2019s tax returns for the period from 2016 to 2018 inclusive. The audit reveals various shortcomings, including discrepancies between the tax returns and the accounts (reconciliation discrepancies) and an incorrect deduction of input VAT for the premises. In 2022, the Tax and Customs Administration will issue additional tax assessments for 2017 and 2018, incorporating corrections for these issues.<\/p>\n
For a tenancy to be subject to VAT, the property must be used for purposes in respect of which there is a full or virtually full right to deduct VAT. Furthermore, the landlord and tenant must have agreed to this in writing or have jointly submitted a request to the tax inspector. The court finds that the tenancy agreements with the sub-tenants explicitly state that no VAT is charged. The business owner has not demonstrated that the parties opted for a taxable tenancy or submitted a joint application.<\/p>\n
As subletting is exempt from VAT, the business owner does not use the premises for services in respect of which there is a full or virtually full right to deduct input VAT. Consequently, the entrepreneur was unable to rent the premises from the private limited company with an option for taxable letting. The entrepreneur is therefore not entitled to deduct this input VAT. The inspector\u2019s adjustments are justified.<\/p>\n
An entrepreneur has been renting a number of business premises in a building since 2016. The landlord accounts for VAT on<\/p>","protected":false},"author":2,"featured_media":4593,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4592","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts\/4592","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/comments?post=4592"}],"version-history":[{"count":0,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts\/4592\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/media\/4593"}],"wp:attachment":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/media?parent=4592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/categories?post=4592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/tags?post=4592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}