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IP/08/1029

Brussels, 26 June 2008

VAT: Commission tackles the Netherlands over its exemption for the provision of personnel

The European Commission has formally requested the Netherlands to amend its legislation with regard to the VAT exemption applied tothe provision of personnel in certain sectors from VAT. The request is in the form of a reasoned opinion which is the second stage of the infringement procedure provided for in Article 226 of the Treaty. If the Netherlands fails to comply with the reasoned opinion within two months, the Commission may refer the matter to the Court of Justice of the European Communities.

The Netherlands applies a VAT-exemption for the provision of personnel in the socio-cultural sector, the health sector and the education sector. The VAT Directive provides for a general exemption in these sectors. The Court of Justice, however, has made clear on several occasions that the exemptions in the VAT Directive are to be strictly interpreted, since they constitute exceptions to the general principles of levying VAT on all services supplied by taxable persons. The Commission is of the opinion that the provision of personnel in the sectors in question in this case is not covered by the general exemptions granted by the VAT Directive. In other words, the Commission believes that the VAT exemption for the socio-cultural sector, the health sector and the education sector is too wide an application by the Netherlands.

In addition, public corporate bodies providing personnel to EU regions are not considered as VAT taxable persons under Dutch legislation and as a consequence the services they supply are not subject to VAT in the Netherlands. The Commission is of the opinion that these public corporate bodies do act like private bodies when they provide personnel and should therefore qualify as taxable persons. subject to VAT.

The Commission's reference number is 2006/4674.

For the latest information on infringement proceedings, go to:

http://ec.europa.eu/taxation_customs/common/infringements/infringement_cases/index_en.htm


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