In a Dutch court case, the question was raised what the VAT treatment was for organising racing events on the Dutch racing circuit in Zandvoort. More specifically, a German company (“X”) organised a racing event in Zandvoort, the Netherlands, for which it issued an invoice to its customer, also based in Germany. X charged German VAT, treating its services as ‘generic B2B services’ (article 44 EU VAT Directive).
X claimed back Dutch input VAT paid in the Netherlands, after which the Dutch VAT inspector raise question (and eventually an assessment), as he believed that the services that X perfomed were subject to Dutch VAT, specifically the (re-)charges for accommodation, catering, circuit and transport costs and an evening event (a barbecue).
The Zeeland-West-Brabant District Court followed the VAT inspector. According to the Court, it followed from X’s invoices that X’s customers could choose for each of their end users (the participants) which services they purchased from X. One invoice showed that a barbecue had been charged separately for five of the participants, because no overnight package had been purchased for those participants. For some of the end users, and to that extent also for X’s customers, the overnight stay was therefore not important. For participants who had opted for an overnight stay, this did not change their participation in the event. It also followed from that invoice that people stayed overnight and ate without participating in the racing event.
The overnight stay and catering activities were therefore a goal in itself for those people (and therefore also for X’s customers). The different performances were therefore easy to separate.
The Court thus decided that X should have charged Dutch VAT on the separate services. The Court did not agree with the argument that X provided a composite service. The Court rejected X’s argument and upheld VAT assessment.
Source: futd.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.
