TA 53560-11-21 Neve Gad – Building and Development Ltd. v. Director of Value Added Tax – Tel Aviv Central
TA 53560-11-21 Neve Gad – Building and Development Ltd. v. Director of Value Added Tax – Tel Aviv Central (Nevo 09.11.2023)
The Court partially granted the appeal filed by the appellant regarding the VAT director's decision not to allow her to deduct input tax on attorneys' fees – residents in an evacuation-reconstruction (Pinui-Binui) project, and addressed the question of whether a development company is entitled to claim a deduction for input tax included in a tax invoice issued by the residents' attorney in an urban renewal transaction, issuing a precedential ruling that the developer may be permitted to deduct the input tax.
The Court held that this constitutes a service that is an integral part of the overall expenses required for the execution of the project, and that while the legal service was provided to the residents and they benefited from it, the same applies to relocation, moving, and other resident-specific expenses from which they benefit, yet these are still included within the scope of "construction services."
