The provision of teaching staff by educational institutions normally leads to the payment of VAT. However, the European tax court ruled in 2007 that under certain conditions, providing educational staff can be considered a VAT-exempt activity. The Dutch Secretary of State for Finance has clarified the conditions for VAT exemption in recent decisions. The conditions for VAT exemption include the lending educational institution applying the legal exemption for education, the borrowing institution using the staff for activities that are VAT-exempt, and the provision of staff being essential for the VAT-exempt activities. Additionally, the provision of staff should not aim primarily to obtain extra revenue from activities in direct competition with commercial businesses subject to VAT. If the remuneration for staff provision is limited to gross wage costs, the Dutch Secretary of State will assume that the above condition is met. This is a further clarification of previous conditions for VAT exemption.
Source: flynth.nl
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