The Dutch secretary of finance has announced the removal of a statement on the tax authorities’ website that allowed for an employee’s personal contribution towards personnel benefits, business gifts, or other gifts to be deducted from the expense total when calculating whether a threshold amount of EUR 227 is exceeded for VAT deduction purposes. This statement will be terminated from 1 January 2024. The decision may be due to the fact that the statement diverges from the standstill provision of the 1968 decree on the exclusion of deduction of VAT (BUA) and could result in a possible infraction procedure by the European Commission against the Netherlands. Businesses may continue to exclude employee contributions from the expense total for purposes of the threshold in their final VAT return for 2023 but not from 2024 onwards.
Source Deloitte
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