- Continuation of Reduced VAT Rates: State Secretary Heijnen of Finance confirmed that the lower VAT rate will persist for various cultural, sporting, and media-related activities, including museum admissions, sports events, theatre performances, e-books, and sports, as part of the Preservation of Reduced VAT Rate on Culture, Media, and Sport Act.
- Reevaluation of Alternatives: The government explored alternatives to maintain the reduced rates but found insufficient support in the House for scrapping other reduced rates or increasing VAT rates generically. The decision maintains the high VAT rate of 21% for accommodation starting January 1, 2026, despite concerns from entrepreneurs and citizens.
- Complexity and Evaluation of VAT System: The government recognizes the complexity of the current VAT system and the need for standardization, although political support for such changes is lacking. The policy’s effectiveness in achieving specific goals is challenging to assess, and the memorandum outlines the financial impact of the low VAT rate, indicating a structural increase in the tax burden on citizens.
Source Taxlive
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