- Insight into Implementation Costs: The research report titled “VAT Compensation Fund in Practice” examines the implementation costs incurred by municipalities and provinces engaged in activities related to the VAT Compensation Fund (BCF). Finance Minister Heinen has submitted this report to the House of Representatives for review.
- Purpose of the VAT Compensation Fund: The BCF allows municipalities and provinces to reclaim VAT paid under specific conditions, aiming to mitigate distortions caused by VAT that can affect local authorities’ decisions on outsourcing versus performing tasks themselves. The initiative addresses the increased costs associated with outsourcing due to VAT.
- Findings on Financial Burdens: The study revealed that in 2023, municipalities faced average implementation costs exceeding €32 million related to the BCF, while provinces incurred almost €7 million. These costs primarily stem from administrative tasks and evaluating the relevance of expenditures for the BCF. As these findings will inform a broader future evaluation, no immediate government response has been issued.
Source Taxlive
