AG: Education of minors is also an economic activity

• Advocate General Ettema believes there is a direct VAT link between the government contribution and course fees received by Stichting X for the education it offers, asserting that both are tied to the educational services provided to students.
• The District Court of The Hague required Stichting X to perform a pre-prorata calculation for costs related to both economic and non-economic educational activities, while the Court of Appeal found no mutual dependence between these activities and determined that X incorrectly claimed input tax deductions for non-economic activities.
• Ettema’s opinion supports the need for further factual investigation into the relationship between taxed and exempt turnover, indicating that the government contribution should be considered part of the remuneration for economic activities in the pro-rata calculation.

Source Taxlive

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Advocate General Ettema concludes that all educational activities of the ROC should be considered an economic activity for VAT purposes, contrary to previous court decisions. The AG advises the Supreme Court to uphold the ROC’s appeals and refer the cases for further handling, stating that no pre pro rata should be applied to the educational services.

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.

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