Dutch Budget abolishes goods self-supply VAT on partial exemptions

Last week’s budget included some minor changes to the Dutch VAT regime.  This include abolishing deemed self-supply on goods produced in-house if similar goods were not fully allowable for VAT deductions.

The Dutch VAT change is targeted at financial institutions, public bodies, hospitals and housing associations which take part in partially VAT taxed activities.  It will effect projects already underway.

The Dutch measure, known as Intergratielevering, allowed for the deductibility of VAT on goods and immovable property produced by a company for its regular business use.  Following this change, VAT may only be offset against the company’s VAT liability if the goods are fully used for the business activities.