On May 18, 2017 the Dutch Government opened a consultation regarding its intention to expand the application of the btw-herzieningsregels (VAT-revision regulations) to so-called costly services. For doing so the Dutch Government intends to amend the Articles 13 and 14 of the Uitvoeringsbeschikking Omzetbelasting. The consultation will run until June 15, 2017.
These costly services are (investment) services that are rendered to an entrepreneur and that are used for a longer period of time within the company of that entrepreneur. Usually the costs incurred with respect to such costly services are capitalized on the balance sheet and depreciated over a period of time. These services therefore display the same characteristics as investment goods.
The purpose of the proposed amendments is to remove an imbalance in following the deduction of VAT at the purchase of assets depending on whether it regards an investment (good) or an investment (service).
Unlike in case of the supply of investment goods, the VAT revision regulations do not provide for the possibility of adjusting the deductibility of VAT on purchased services during several years in accordance with how that service is being used (i.e. is the service being used for activities that are subject to VAT or is the service used for VAT exempt activities). Nevertheless, these services can be large investments. The alteration of a business premises for example can be regarded as a service for VAT. The underlying proposal would make it possible to - as with the purchase of an investment good - revise/correct the deduction of VAT in accordance with how the services are being used.
Click here to be forwarded to the website of the Dutch Government where more information regarding this consultation can be found.
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