Netherlands Updates VAT Deduction Decree: Adjustment for Investment Services and Broader Approval for Members of Owners’ Associations

Summary

The Dutch VAT adjustment rules have been extended to investment services. The VAT Deduction Decree has been aligned with the statutory rules introduced on 1 January 2026 for qualifying services relating to immovable property. The VAT initially deducted on such services may therefore need to be adjusted if the use of the investment changes during the adjustment period.
The approval allowing businesses that are members of an owners’ association to deduct VAT has been broadened. It is no longer necessary for the owners’ association itself not to qualify as a VAT-taxable person. The decisive factor is whether the association acquired the relevant goods or services in its capacity as a taxable person.
The amending decree enters into force on 25 August 2026. Businesses should identify qualifying investment services separately, document their initial use and monitor changes in use during the applicable adjustment period. Business members of owners’ associations should review how shared costs and the related VAT are allocated.

Extended article

1. VAT Deduction Decree updated

The Dutch State Secretary for Finance has updated the policy decree governing the deduction of VAT. The principal changes concern two areas:

the incorporation of the VAT adjustment rules for investment services introduced on 1 January 2026; and
the approval allowing businesses that are members of a Dutch association of owners, a Vereniging van Eigenaars or VvE, to deduct VAT that the association itself has not deducted.

The amending decree modifies the Decree of 24 November 2020, No. 2020-167584, on the deduction of VAT. The consolidated policy decree is available through the Dutch government’s website under VAT: Deduction of Input VAT. [wetten.overheid.nl]

The amendment enters into force on 25 August 2026.

2. Adjustment rules extended to investment services

The first major change incorporates the VAT adjustment regime for investment services into the existing policy decree.

Historically, the special multi-year VAT adjustment rules in the Netherlands focused primarily on capital goods, including immovable property. Since 1 January 2026, certain services relating to immovable property may also be subject to a multi-year VAT adjustment.

The legislative basis for this change was included in the Dutch Tax Plan 2025. The relevant explanatory memorandum discusses the new rules under the section concerning services relating to immovable property. The parliamentary documentation can be consulted in Parliamentary Paper 36 602, No. 3. [zoek.offic…akingen.nl]

The updated decree introduces a definition of an investment service and adjusts various provisions so that references to the VAT adjustment mechanism cover both capital goods and qualifying investment services.

According to the published information, the rules apply to investment services relating to immovable property where the consideration amounts to at least €30,000. These are services whose economic benefits are not consumed exclusively in the year in which the service is performed but continue over a longer period. The input VAT deducted on such services may consequently be adjusted if the use of the immovable property changes during the adjustment period. [taxence.nl]

3. Purpose of the adjustment mechanism

The extension addresses the difference in VAT treatment that could arise between economically comparable forms of investment.

The acquisition or construction of an immovable property was already subject to a multi-year VAT adjustment mechanism. By contrast, significant renovation, conversion or improvement services could be treated differently where they qualified as services rather than as the acquisition or manufacture of a capital good.

The new rules more closely align the VAT treatment of substantial services relating to immovable property with the treatment of capital goods.

If a qualifying investment service is initially used for VAT-taxable activities but is subsequently used for exempt or non-economic activities, part of the VAT originally deducted may have to be repaid.

Conversely, an additional deduction may become available where the use changes from activities that do not carry a right of deduction to activities that do.

The result is that the final VAT deduction should more accurately reflect the actual business use of the investment over time.

4. Practical consequences for businesses

The change is particularly relevant for businesses undertaking significant real estate projects, renovations, conversions, installations or other services that have a lasting connection with immovable property.

Businesses will need to determine:

whether the supply qualifies as a service for VAT purposes;
whether the service relates to immovable property;
whether it meets the statutory conditions for an investment service;
whether the applicable monetary threshold is reached;
when the investment service is first put into use;
the initial deductible-use percentage;
whether that use changes during the adjustment period; and
the amount of any annual VAT adjustment resulting from that change.

A project may involve multiple contracts, suppliers and invoices. Businesses should therefore consider whether individual services must be assessed separately or whether several supplies form part of one economically and contractually connected investment.

The classification should not necessarily be based solely on the amount shown on each invoice. The contractual arrangements, economic purpose and relationship between the different services may also require consideration under the applicable VAT rules.

5. Broader approval for business members of owners’ associations

The second material amendment concerns paragraph 5.2.3 of the VAT Deduction Decree. This paragraph contains an approval for businesses that are members of an owners’ association.

A VvE commonly purchases goods and services for the shared use, management or maintenance of a building. Supplier invoices are generally issued to the association, while the costs are ultimately funded through contributions from its members.

Where a member uses part of the building for VAT-taxable business activities, the absence of a deduction mechanism could result in irrecoverable VAT or VAT accumulation.

Under the existing approval, a business member can, subject to conditions, deduct its share of the VAT that the VvE did not deduct. Previously, one of the conditions was that the VvE itself did not qualify as a taxable person for VAT purposes.

That condition has now been removed.

The relevant question will instead be whether the VvE acquired the particular goods or services in its capacity as a taxable person.

This makes the approval more suitable for VvEs that act as taxable persons for some activities but not for others.

6. VAT status of the owners’ association is no longer decisive

An owners’ association may carry out both activities that fall within the scope of VAT and activities that do not.

For example, an association could conduct an economic activity through the operation of electric-vehicle charging points or the letting of certain areas, while continuing to purchase other goods and services solely for the common management of the building. The published explanation specifically refers to charging-point operations and the letting of spaces as examples of activities for which VvEs are increasingly treated as VAT-taxable persons. [taxence.nl]

The Dutch Tax Administration also explains more generally that foundations and associations may qualify as taxable persons where they regularly supply goods or services for consideration. Its examples include an owners’ association with solar panels on the roof of a building. Further information is available on the Dutch Tax Administration’s page Foundations and associations: turnover and VAT. [belastingdienst.nl]

Under the amended approval, the analysis therefore moves away from the general VAT status of the association and focuses on the capacity in which it made the specific purchase:

If the VvE acquired the goods or services as a taxable person and deducted the VAT itself, that VAT cannot also be deducted by its members.
If the VvE did not acquire the goods or services in its capacity as a taxable person and did not deduct the VAT, a business member may potentially apply the approval, subject to the remaining conditions.
Where costs relate partly to the association’s economic activities and partly to its other activities, an appropriate allocation will be required.
The VvE and its members must ensure that the same amount of VAT is not deducted twice.

The amendment is especially relevant for mixed-use buildings containing residential apartments, offices, shops or other commercial premises.

7. Recommended actions for businesses

Businesses should consider taking the following actions:

identify relevant investment services performed or brought into use from 1 January 2026;
review real estate projects, renovations and major installations against the definition of investment services;
determine whether the €30,000 threshold is met;
record the date on which each qualifying investment service is first used;
document the original business use and input VAT deduction percentage;
add qualifying investment services to the existing VAT adjustment register;
monitor changes in taxable, exempt and non-economic use during the adjustment period;
review costs charged through owners’ associations;
establish in which capacity the VvE acquired the relevant goods or services;
document the allocation of costs and VAT to each business member;
verify that VAT is not deducted by both the VvE and the member; and
coordinate the process between Tax, Accounts Payable, real estate management and the VvE’s property manager.

Businesses should also review whether their ERP or tax-compliance systems currently distinguish between ordinary operating services and investment services subject to a multi-year VAT adjustment.

8. Conclusion

The amendment is more than a technical update to the Dutch VAT Deduction Decree.

The inclusion of investment services confirms that substantial services relating to immovable property may have to be monitored for VAT purposes over several years. Businesses should therefore expand their existing capital-goods adjustment registers and controls to capture qualifying services.

For business members of owners’ associations, the amendment provides broader access to the existing VAT deduction approval. The fact that a VvE is a VAT-taxable person for certain activities will no longer automatically prevent its business members from applying the approval.

The analysis must instead be performed at the level of the individual purchase. The critical question is whether the VvE acquired the relevant goods or services in its capacity as a taxable person and whether the related VAT has already been deducted.

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