Non-economic activities performed by educational institution: no VAT deduction

• Education institution X provided vocational education and adult education.
• The education was mainly funded by the Ministry of Education.
• Students under 18 did not pay for their education, but older students paid tuition fees.
• X provided both taxable and exempt services.
• X requested additional VAT deduction based on the pro rata method.
• The tax authority argued that some of X’s services were non-economic.
• X appealed, claiming that all their education should be considered economic activity.
• The court agreed with the tax authority, stating that services to students under 18 were non-economic.
• The contributions received by X did not cover the full costs and were more like a fee than a payment for services.
• The court concluded that there was no direct link between the payment and the service provided.

Source: futd.nl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---