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IP/08/1811

Brussels, 27 November 2008

VAT – The European Commission refers the Netherlands to Court of Justice for its VAT exemption for the provision of personnel

The Commission has decided to refer the Netherlands to the Court of Justice for applying a VAT exemption for the provision of personnel.

The VAT Directive exempts certain supplies of goods and services in the socio-cultural, health and the education sector. In order to respect the neutrality of the VAT system and avoid unfair competition in the internal market, the Court of Justice has made clear on several occasions that the exemptions in the VAT Directive are to be strictly interpreted. The Commission is of the opinion that the Netherlands applies these exemptions too widely by also exempting the provision of personnel in these areas.

In addition, the Netherlands does not consider public corporate bodies providing personnel to Euregions to be VAT taxable persons. Therefore services supplied by them are not subject to VAT. The Commission is of the opinion that these public corporate bodies do act like private bodies (like, for instance, job agencies) when they provide personnel, and should therefore qualify as taxable persons, subject to VAT.

The Commission sent a reasoned opinion to the Netherlands in June 2008 (see IP/08/1029). As the Netherlands has not amended its legislation within the time limit laid down, the Commission has decided to refer the matter to the Court of Justice.

The case has been assigned No 2006/4674 by the Commission.

Press releases relating to infringement proceedings in the filed of taxation and customs can be consulted at:

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

The most recent general information on infringement proceedings initiated against the Member States can be consulted at:

http://ec.europa.eu/community_law/index_en.htm


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