Tax authorities more critical on the place of establishment for VAT

Since the United Kingdom left the EU, we have seen that the Dutch tax authorities are more critical on the place of establishment of Dutch companies with a foreign board. In the absence of a Dutch board, a company is not established in the Netherlands for tax purposes, with all the practical VAT consequences that this entails.

It was inevitable that this would lead to legal proceedings and the District Court in The Hague recently confirmed this position in a specific case. The Court concluded that the place of establishment of a company incorporated under Dutch law is Spain, because the company's decisions are taken there by the general management, the managing director/director who lives and resides in Spain.

If you have any questions regarding the above, please contact our team.