Partial VAT deduction for educational institution: Pro-rata method for mixed costs disputed in court

• An educational institution is only entitled to partial VAT deduction
• The institution provides vocational education (mbo) and adult general education (vavo)
• Students over 18 pay tuition to DUO for full-time courses and directly to the institution for part-time courses
• The institution calculates VAT deduction on mixed costs using the pro-rata method
• The tax inspector argues that only part-time education is an economic activity
• The institution must make a pre-pro-rata calculation and then a pro-rata calculation
• The court agrees with the inspector that not all activities qualify as economic activities
• Non-economic activities make up over 80% of the institution’s offerings

Source: fiscount.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.

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