Netherlands: Adjustments to VAT return for employer-provided gifts, benefits, private use of company cars

Netherlands: Adjustments to VAT return

The final value added tax (VAT) return for the financial year—for most businesses, the return for the fourth quarter of 2020 or the December 2020 return—must include adjustments under the VAT “deduction exclusion decree” and for the private use of company cars.


The adjustment affects the recovery of VAT on staff benefits, promotional gifts, and other gifts.

The VAT “deduction exclusion decree” (Besluit uitsluiting aftrek omzetbelasting) precludes the recovery of VAT (also referred to as input VAT) on promotional gifts and staff benefits if provided free of charge or below cost by the employer. The fact that employers may have a business-motivated reason for providing gifts and staff benefits (for example, client relationship management, staff commitment, etc.) is irrelevant. The rationale for not allowing input VAT to be recovered is based on the fact that these costs, while business-related, are consumption-oriented, and VAT is a tax specifically designed to tax consumption. A threshold of €227 per recipient applies.

  • If the total purchase or productions costs (the cost price) of the provisions are less than €227 (excluding VAT) per recipient per financial year, then the employer does not have to make a deduction exclusion decree adjustment.
  • If the threshold is exceeded, then the employer must make an adjustment in the last VAT return of the financial year. This is a final threshold—if the threshold is exceeded, the input VAT on the provisions within the threshold amount is also non-recoverable.

Read a January 2021 report prepared by the KPMG member firm in the Netherlands that includes a flowchart setting out the steps for preparing the VAT deduction exclusion decree calculation and also explains the effect of the VAT adjustment for the private use of company cars.

© 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organization please visit

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us