Toggle navigation


Call our advisers
+31(0)20-344 5900,

Or send us an email

Written by:
Bas Hollenberg


Combined business?

Sideline partnership
A farming partnership (VOF) has laid a golf course on the same ground used for farming activities. A recent court case questioned to what extent the golf course was a sideline activity of the partnership and if land was withdrawn from the agricultural business for the golf course.

The tax office did not consider the golf course to be a sideline activity of the farm. The partnership believed that there was sufficient interdependence between the two enterprises to consider it one enterprise and that no agricultural land was used for the golf course.

According to the courts the golf course was not ancillary to the production of the farm. The golf course did contribute to the profits of the partnership but not to the production of the agricultural products themselves. The land used for the golf course had no function in the farm. Therefore the land was withdrawn from the farm and in the business accounts this difference between the book value and economic value of the property must be taken into account.

The Amsterdam higher court reached their conclusion on the question whether there was one or two enterprises based on a different premise. According to the court the nature of the organization and the relative scope of the activities were determining factors. Given the scope of the investment in the laying of a golf course and the associated facilities, and the profit relating to the golf course, there was a new enterprise in addition to the existing one. The court also came to the conclusion that land was withdrawn from the farm for the purposes of the golf course.

Send this to a friend