Zeeland-West Brabant District Court has ruled that the voluntary contribution for meditation retreats should be subject to VAT.
Dana
The case concerns a foundation that organises and supervises multi-day retreats to practice Vipassana meditation. The foundation's activities are funded by contributions based on the Dana principle. This means that participants make voluntary donations.
The Tax Court, after (re)assessing the foundation's tax liability, considers that the contributions received should be taxed with VAT. The court agreed.
Onerous title?
A supply is subject to VAT if it is made for consideration. This means that there must be a direct link between the service rendered and the consideration received. There must be a reciprocal exchange of services. This is not the case if the consideration is completely voluntary and arbitrary or if the amount of the consideration is difficult to quantify or uncertain in the light of the circumstances surrounding its determination.
The court considered that the foundation was performing its services for consideration. The foundation received fees from the participants, also asked for these fees and refunded the fees upon cancellation. There is reciprocal exchange of services.
Furthermore, it has not been claimed that the fees have only partially reimbursed the costs of the retreats. The fees received balanced the costs incurred by the foundation, mainly for accommodation and catering.
And the fee is not completely voluntary and arbitrary, as the fees received are based on an amount of €53 per overnight stay (with a small discount when participating in the full retreat).
Only for the guidance of the retreat, the remuneration received by the foundation is based entirely on the Dana principle. However, the procedure established that participation in the retreat is considered a single service for VAT purposes.