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06 December 2019 / article

No VAT due on the passing on of the water treatment levy

According to the Gelderland District Court the proportional passing on of water board charges qualifies as a tax disbursement, with the result that the passing on of these charges is not subject to VAT.

Belgian Constitutional Court decides on Fairness Tax

A campsite operator passed on the water treatment levy to the tenants and owners of the plots on his holiday park. The tax inspector stated that the operator should have charged VAT on this. The operator disagreed and lodged an appeal with the District Court.

Question of law

The question is whether or not the proportional passing on of water board charges is subject to VAT.

Assessment by the District Court

According to the Gelderland District Court, the campsite operator is carrying out a single recreational service consisting of the provision of the tourist pitches and the supply of water. In this context, the supply of water should be regarded as an additional service aimed at making the letting of tourist sites more attractive.

The Court then agreed with the operator that the water board charges that had been passed on could not be subject to VAT because of so-called tax disbursements. The operator pays the water treatment levy for the visitors and then charges it proportionally (without surcharge).

Practical implications

In practice, it is often the case that enterprises 'advance' certain amounts that are ultimately borne by their customers (in this case, the visitors). This ruling shows that under certain conditions, tax disbursements (and other types of transitory items) may not be subject to VAT.



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