Hospice Services Taxed at 21% VAT; Renovation VAT Deductible, Not Medically Exempt

The hospice foundation provides rooms, meals, and general care, but not direct medical care, to guests.
The tax inspector and lower court initially ruled the foundation’s services were medically exempt from VAT, denying VAT deduction on renovation costs.
The Arnhem-Leeuwarden Court ruled the foundation’s services are not medically exempt, as it does not provide medical care itself, nor is it a social or cultural institution.
The court also found the hospice service does not qualify as short-stay accommodation, so the standard 21% VAT rate applies.
As a result, the foundation can fully deduct VAT on renovation costs; since January 1, 2026, the VAT rate for short-stay accommodations has increased from 9% to 21%.

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.