Hospital’s Liability Insurance Costs Passed to Medical Specialists Not Subject to VAT, Court Rules

• A hospital employs medical specialists and also works with independent medical specialists organized in the Medical Specialist Company (MSB).
• Hospitals are legally co-liable for the medical actions of these specialists and thus have liability insurance (WA-verzekering).
• The hospital passes on part of the insurance premiums to the MSB.
• The tax inspector claims this is a taxable service, requiring the hospital to pay 21% VAT.
• The Zeeland-West-Brabant court disagrees, ruling that the hospital does not provide a taxable service to the MSB.
• The court states that the insurance service is provided by the insurer, not the hospital.
• The hospital merely passes on a contribution to the insurance costs for covering its liability for the MSB specialists’ medical actions.
• Even if the hospital were providing a service, it would be an insurance service, which is VAT-exempt.
• Advice: If you have hospitals in your client portfolio paying VAT on passed-on liability insurance premiums to independent medical specialists, advise them to contest their VAT returns.
• The Tax Authority is likely to appeal this decision, and any potential refunds will be held pending the outcome.

Source: fiscount.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.

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