Hospice services are taxable composite services and are VAT deductible

Hospice services are taxable composite services and are VAT deductible

• The District Court of The Hague ruled that X’s services constitute a single taxable composite supply, allowing X to deduct VAT on the renovation and operation of the hospice.
• X operates a low-care hospice, offering guest accommodations, meals, and support from volunteers, with guests paying €45 per day for room and meal services.
• The court determined that the rental of guest rooms is the primary service, which is subject to VAT, while additional services enhance the appeal of the main offering.

Source Taxlive

---

Short stay rental in hospice entitles you to deduct VAT

• Hospice Operations and VAT Refund Request: A low-care hospice in Rotterdam, which provides short-term accommodations and meals, requested a VAT refund of €83,145 for 2021, mainly for renovation and operating costs, but the Tax and Customs Administration denied the request.
• Tax Classification Dispute: The hospice argued that its primary service was the rental of guest rooms (taxable under VAT Article 11), while the Tax Administration contended that the main service was the coordination of palliative care, which would be exempt under medical or social service exemptions.
• Court Ruling: The District Court of The Hague ruled that the services provided (room rental and meals) constituted a composite supply eligible for a reduced VAT rate, concluding that the hospice’s taxable transactions allowed it to deduct the VAT, regardless of the separate nature of volunteer services.

Source BTW Jurisprudentie

ECJ Cases referred to:

• C-349/96 (Card Protection Plan) – Composite supplies whether they constitute or include insurance – VATupdate
• C-231/19 (BlackRock Investment Management (UK) Ltd) – Judgment – VAT treatment of management services outside scope of the exemption
• C-581/19 (Frenetikexito) – Nutritional advice within the fitness center is an independent VAT service, not exempted from VAT

See also

• Roadtrip through ECJ Cases – Focus on ”Composite supplies” – VATupdate

---

Low-Care Hospice Entitled to VAT Deduction for Services Provided, Court Rules

• The court in The Hague ruled on July 16, 2025.
• A low-care hospice performs taxable activities and is entitled to deduct VAT charged to it.
• The case involves determining whether the hospice’s activities are a single service for VAT purposes or separate services.
• According to EU Court of Justice case law, each service is usually considered distinct and independent unless they are so closely linked that they form a single economic service.
• The court examines if the provision of guest rooms, meals, volunteer services, and coordination are so interconnected that they form one indivisible economic service.
• The assessment considers the characteristic elements of the service from the perspective of the average consumer.
• Intellectual elements are decisive in determining if the service elements are indivisible and have a single economic purpose, while material elements are supportive.

Source: uitspraken.rechtspraak.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.

---

---