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13 March 20242 minute read

Dutch judgment on the VAT treatment of transaction costs related to the sale of shares


A Dutch taxpayer (BV) that is part of an international group engaged in the installation of air handling systems renders management services to other group companies.

In 2020, the BV was acquired by a French SA (SA). In order to finance this acquisition, SA instructed BV to sell some of its subsidiaries. BV instructed two consultants to find a potential buyer. The question was whether (i) the services provided by the consultants were exempt from VAT and (ii) if not whether the self-assessed Dutch VAT was recoverable for BV.

The Dutch court ruled that the services performed by two consultants qualified as VAT exempt intermediary services in a sale of shares. As a result, BV was not required to self-assess Dutch VAT for these services.

BV also incurred costs from other consultants which were not exempt from VAT. For these expenses, BV argued that it should be eligible for VAT recovery as these costs were to be viewed as general expenses. The court held that these costs could not be seen as general costs of BV and lacked a direct relationship with the economic activity of BV. As a result, BV was not eligible for VAT recovery of the self-assessed VAT.


Key takeaway

The judgement of the court confirms that services rendered by consultants related to finding a purchaser for a legal entity are exempt from VAT.

Additionally, the court decision shows that it is difficult to obtain recovery of VAT incurred on transaction costs related to the sale of shares.

Reference: Uitspraken