Netherlands: New policy statement on VAT fixed establishments

Netherlands: New policy statement on VAT

The Deputy Minister of Finance in December 2020 published a new policy statement concerning the rules for value added tax (VAT) fixed establishments. The policy statement is relevant for internationally operating businesses with one or more fixed establishments.


The policy statement, among other things, sets out the government’s position concerning the concept of a fixed establishment and the VAT treatment of transactions between a head office and a fixed establishment. One important change from the previous policy statement (2003) is an update of the guidelines on VAT recovery.

The policy statement addresses:

  • Sales fixed establishment and purchase fixed establishment
  • No VAT on transactions between a head office and fixed establishment
  • VAT recovery right on the basis of cross-border use of costs

Read a January 2021 report prepared by the KPMG member firm in the Netherlands

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