VAT refund in respect of cancellations due to coronavirus?
The vast majority of upcoming events have been cancelled due to comprehensive measures to contain the coronavirus.
As event organizer you may be eligible to reclaim VAT from the Dutch tax authorities that has already been paid on ticket sales or subscription fees.
If events are cancelled there are opportunities to reclaim VAT that has already been paid to the Dutch tax authorities. The underlying reason is that no provision of services actually takes place and 'no VAT should be levied if no services are provided'. In practice, VAT on ticket sales or subscription fees often concerns significant amounts.
It concerns VAT relating to (entrance) fees for:
- sports events
- theatre performances
- fitness subscriptions
- et cetera
We are of the view that VAT should be recoverable if the fees are refunded to the customer. But also if customers do not receive a repayment, there are ample arguments to obtain a VAT refund with the Dutch tax authorities.
What to do next?
To reclaim the VAT in respect of cancellations it is necessary to act quickly. In the interest of preservation of rights we advise our clients to file a formal objection with the Dutch tax authorities against the VAT payment or VAT refund following the periodic VAT return for the period in which the cancellation took place.
Further cash flow optimization
Please note that one might consider other measures to optimize cash flow, such as requesting for deferred payment of VAT, delayed invoicing, changing VAT return filing periods and/or (de)consolidation by means of VAT grouping.
If you have questions or wish to discuss VAT optimization measures for your business, please do not hesitate to contact our advisors of the indirect tax team.
Patrick VettenburgSenior associate Tax adviser
Patrick Vettenburg, tax adviser, is a member of our Indirect Tax practice Group in our Rotterdam office with a focus on corporate VAT, audits and the VAT aspects of international trade of goods and services.T: +31 10 224 66 51 M: +31 6 13 06 82 79 E: firstname.lastname@example.org