- The case involves whether the appellant can apply the exemption for services provided to participating water boards
- The dispute focuses on whether the use of the Distribution Model leads to the appellant claiming reimbursement only for the exact share of the involved water boards in the joint expenses for those services
- It also questions whether the services provided by the appellant cause competition distortion as per Article 11 of the Wet OB
- The Inspector disagrees with the first issue and agrees with the second, seeking to overturn the lower court’s decision
- The appellant holds the opposite views and aims to uphold the lower court’s ruling
- It is no longer disputed in the higher court that other conditions for applying the exemption are met
- The exemption under discussion is based on Article 132 of the EU VAT Directive which allows exemptions for services provided by independent groups to their members, necessary for their activities, provided it does not lead to competition distortion
- The Court of Justice’s jurisprudence mandates a strict interpretation of these exemptions as they are exceptions to the general principle that every taxable service should be subject to VAT
- However, this strict interpretation should still align with the objectives of the exemptions and the principle of fiscal neutrality inherent in the common VAT system
- The purpose of the exemption is to introduce a VAT exemption to prevent taxation on a person providing certain services within a cooperative structure necessary for those services
Source: uitspraken.rechtspraak.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.
