Netherlands: No VAT liability for boards of directors, supervisory officers

A decree regarding VAT treatment of services provided by members of supervisory boards, boards of directors, and supervisory officers was issued.

A decree regarding VAT treatment of services provided by supervisory officers

The Deputy Minister of Finance in May 2021 issued a decree regarding the value added tax (VAT) treatment of services provided by members of supervisory boards, boards of directors, and others identified as “supervisory officers.”

The position of the Deputy Ministry of Finance, as announced in the decree, is that individual members of supervisory bodies do not qualify as VAT-able persons, if and insofar as the relevant boards or committees are only jointly authorized to make decisions or monitor activities, and the individual members therefore do not independently have such authority or responsibilities.

With the decree, supervisory officers or directors who are only jointly responsible for their duties or can only make joint decisions are no longer required to charge VAT on their fees for services. Consequently, these supervisory officers are no longer allowed a refund of the VAT that they paid on costs associated with the performance of their supervisory tasks.

The decree was issued in response to a June 2019 judgment of the Court of Justice of the European Union (CJEU) and a Dutch Supreme Court judgment in June 2020. The decree is effective retroactively to 13 June 2019 (the date of the CJEU judgment).

The decree provides that if a supervisory officer charged VAT up to May 2021, that person does not have to make a correction, provided the principal has deducted that VAT. In that situation, the supervisory officer also retains the right to VAT recovery.

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

 

 

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.