Update - Tax cases

Mixed use

The claimants bought a bungalow in the Netherlands which was used partly for holiday lettings and partly for private use. The lettings did not qualify for the VAT exemption for the letting of immovable property. The claimants claimed as input tax all the VAT invoiced to them in connection with the property based on the principle in Lennartz [1991] ECR I-3795.
The Netherlands tax authorities only allowed 87.5% this being the proportion of business use relying on Netherlands law before the Sixth Directive came into force. In essence this did not allow capital assets used for business and private purposes to be considered a wholly business asset. On appeal the matter was referred tot he European Court of Justice asking if the legislation was compatible with the directive.
The European Court said that where capital goods has a business and private purpose...