Dutch Court Did Not Allow to Deduct Hopeless Losses

Dutch Court Did Not Allow to Deduct Hopeless Losses

A Dutch court has ruled that losses from trading activities in the form of hopeless debts are not deductible for tax purposes. 

The court’s decision was made for the case of an individual having regular losses between 2004 and 2008 from online stamp dealing business. The taxpayer intended to deduct those losses from income derived from other sources (regular income). Tax authority resolved that the taxpayer’s losses were suspicious and they were made purely for tax avoiding, therefore the losses could not be deducted against taxpayer's income.

The court took sides of tax authority and stated that business, which did not bring profit, was pointless. Doubtfulness of those losses was confirmed by the fact that the taxpayer had been doing stamp dealing business before 2001, and is also had had extremely low turnover and had not brought profit. Hereupon the taxpayer’s stamp dealing business was not considered as genuine and the court did not allow losses deduction for tax purpose.   

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