Finance has (finally) clarified how to deal with commissioners and other supervisors in the context of VAT. This has been laid down in a new decision.
Exempt organisations
This is especially important for exempt organisations. After all, the VAT charged by commissioners and supervisors to these organisations is not deductible. This VAT “sticks”; is cost-prohibitive for the organisation.
These organisations would be wise to investigate (or have investigated) whether their commissioners and supervisors are exempt from VAT. If VAT has been wrongly charged, this may from 13 June 2019 be reversed. The commissioner or supervisor sends a credit invoice for the amount of VAT, reclaims the remitted VAT from the tax authorities and pays this amount to the organisation at which he or she is a commissioner or supervisor.
REMEMBER: the commissioner or supervisor must apply to the Tax Administration for a VAT refund (depending on the amount, this may be done in the next VAT return, or supplementary returns must be filed). The Inland Revenue does not refund the tax on its own accord.
Incidentally, commissioners and supervisors will in many cases have chosen to apply the small business scheme (KOR). In that case, their services are exempt from VAT. Since 1 January 2020, application of the KOR must be requested in advance. The turnover of a small entrepreneur may not exceed €10,000 per calendar year.
Deductible organisations
Organisations that can deduct all VAT obviously do not benefit from a correction. The decision therefore approves that these organisations should not be allowed to revert to the deduction of VAT charged to them by their commissioners and supervisors. Of course, this approval can only be used if the commissioner or supervisor does not credit his or her invoices.
REMEMBER: However, it is imperative that these organisations inform their commissioners and supervisors that they can no longer invoice VAT. Indeed, VAT wrongly invoiced after 6 May 2021 may no longer be deducted.
Main rule
The aforementioned date of 13 June 2019 refers to the date on which the European Court of Justice handed down the OI judgment wees. Finance rightly distils from this ruling the main rule that supervisory directors and supervisors are not subject to VAT.
This is different only if the commissioner or supervisor acts sufficiently independently. In the vast majority of cases, a supervisory body acts as such. Its members do not act individually and bear no individual responsibility.
In the decision read what specific conditions must be met.