Wage Deductions for Employee Housing Are VAT-Taxable, Court Rules Against Lithuanian Agency

• A Lithuanian employment agency provides staff to Dutch clients and arranges housing for them, deducting a fee per worked hour from their wages.
• The agency claims the housing fee is not a taxable service, but the tax inspector disagrees.
• The court (Hof Den Bosch) sides with the inspector, ruling there is a direct link between the housing provided and the compensation paid by the staff.
• The agency should have filed a Dutch VAT return for this service and could have reclaimed VAT through that process, not via Article 31, sections 2 and 3 of the Dutch VAT Act.
• The agency’s VAT refund requests under Article 31 were rightly rejected.

Source: fiscount.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.

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