In 2020, the Dutch Supreme Court ruled that a member of an objection advisory committee does not act as a VAT entrepreneur. According to the Court the work carried out is not done in his/her own name, not for his/her own account and not under his/her own responsibility. This means that a member of an advisory committee on objections, a supervisory board, etc. does not act as an independent VAT entrepreneur and is therefore not liable for VAT on the fee received. This was partly the result of a ruling by the European Court of Justice (the ‘IO’ case).

The Dutch Ministry of Finance has recently issued a Decree based on the ‘IO’ case to clarify the position of supervisory boards, members of an internal supervisory body, such as supervisory councils, members of objections committees and comparable persons who are not employees. The crux of the matter is that VAT entrepreneurship is not readily forthcoming due to the lack of the independence required for entrepreneurship.

Non-entrepreneurship prevents non-deductible VAT if the payer of the fee is not subject to VAT and therefore cannot reclaim VAT. Please, contact us to assess whether in your situation undesirable VAT can be prevented.