Netherlands clarifies tax point prior to supply

Wed 19th Aug 2015

The Netherlands Supreme Court has clarified that invoices issued prior to the performance of a taxable supply will trigger the tax point – the day when Dutch VAT is calculated and becomes liable.

The case under review concerned the provision of business construction services. A contract was issued with the Dutch VAT due, and the customer deducted the input VAT from their next tax return even though they had not yet paid it or the construction provided. The Dutch tax authorities challenged this, and held the company had no right to deduct the VAT.

Tax point on VAT invoice

The Supreme Court held that the Dutch VAT legislation was silent on this point and a tax point on a pre-supply invoice. However, it held that the contract did constitute and invoice and a tax point. The input VAT was therefore deductible at the time.