- Recent court ruling emphasizes careful use of VAT identification numbers for services from other EU countries.
- A passive Dutch holding company was required to pay over 600,000 euros in reverse-charged VAT despite having no taxable activities.
- The holding purchased legal services from foreign providers for a dispute in Croatia and shared its VAT ID, leading to VAT-free invoicing under the reverse charge mechanism.
- The court rejected the holding’s defense that it was not a real entrepreneur and that the VAT ID was wrongly assigned.
- Possession and use of a VAT ID classify an entity as an entrepreneur for VAT purposes, even without revenue.
- The holding should have corrected its registration based on Chamber of Commerce data and was bound by sharing its VAT ID with suppliers.
- Practical implications include only sharing VAT ID if genuinely an entrepreneur, requesting withdrawal of VAT ID if inactive, and being aware of VAT obligations when using a VAT ID.
Source: btwjurisprudentie.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.
