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Netherlands: Corrections for final VAT return for 2018

Netherlands: Corrections for final VAT return for 2018

In the final value added tax (VAT) return for 2018, a VAT correction may be needed to reflect:

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The VAT deduction exclusion decree precludes the recovery of VAT (also referred to as input VAT) on promotional gifts and staff benefits if they were provided free of charge or below cost by the business (whether or not there was a commercial reason for providing the gifts and staff benefits). The rationale for not allowing input VAT to be recovered is that these costs—while business-related—are consumption-oriented. VAT is a tax specifically designed to tax consumption. 

A threshold of €227 per recipient applies. It is not necessary to make a deduction exclusion decree adjustment if the total purchase and development costs (the cost price) of the benefits are less than €227 (excluding VAT) per annum, per recipient. This is a final threshold. If the threshold amount is exceeded, the input VAT on provisions within the threshold amount would be non-recoverable. 


Read a January 2019 report prepared by the KPMG member firm in the Netherlands

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