Decision to terminate value-added tax entity not open to objection
“Value-added tax entity” is a designation applying to businesses that are interlinked financially, organisationally and beneficially to such an extent as to form a single entity. It is the Inspector of Taxes who – be it or be it not upon the request of one or more of the business owners involved – decides to bestow the relevant designation. The decision in question is open to objection.
The Tax and Customs Administration in its decision to the relevant effect announced that a particular value-added tax entity was being discontinued with effect from the 1 January 2013, as not all conditions for earning the tax entity designation had been complied with. The objection the entrepreneurs in question mounted was disallowed owing to the tax authorities’ decision not being open to objection.
The discontinuation of a value-added tax entity is not contingent upon a decision by the Inspector of Taxes which is open to objection. The tax entity comes to an ipso jure end when the statutory requirements are no longer being satisfied in their entirety. According to the State Taxes Act of the Netherlands, the only decisions by the Inspector of Taxes that are open to objection and appeal are those anchored in any one of the provisions forming part of the body of tax legislation earmarked as being open to objection. The Hague District Court concluded that the Tax and Customs Administration had rightly disallowed the objection to its decision.
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