- VAT incurred on the costs of food and beverages supplied to staff, a business relation or the VAT entrepreneur himself visiting a hospitality or catering facility (e.g. hotel, bar, restaurant) for a short stay is never deductible.
- In practice, these costs are regularly passed on by one VAT entrepreneur to another, for example a main caterer that outsources part of the catering to a subcontractor, or a hotel that passes on the costs of a room with breakfast to another hotel if a guest is accommodated at the other hotel.
- Since these entrepreneurs are not allowed to deduct this VAT, double taxation occurs.
- The State Secretary of Finance approves by decree that an VAT entrepreneur who does not purchase this ‘catering service’ as an end user, but who passes on the same service to another entrepreneur, is allowed to deduct this VAT under certain conditions from now on.
- The VAT entrepreneur must state on the invoice to the customer that it concerns the provision of food and beverages for use on the spot as referred to in Article 15, paragraph 5 of the Dutch VAT Act 1968.
- The approval is valid from 23 September 2021.
Source Deloitte
