Safety first, with VAT!

Reverse Charge Mechanism Clarification: The Dutch tax authorities clarified that the reverse charge mechanism for VAT applies strictly to physical work on immovable property, such as construction, and does not extend to supporting services that do not involve direct physical interaction with the property.
Case Study in Railway Safety: In the context of railway safety personnel who manage worksite safety but do not perform physical tasks on the railway itself, the reverse charge mechanism cannot be applied, resulting in the regular VAT rate being applicable instead.
Implications for Businesses: Businesses providing essential support services, like traffic control for roadworks, may wish to apply the reverse charge for administrative ease, but must adhere to the clear legal definitions that restrict this mechanism to actual construction or physical maintenance work.