Background
In the acquisition or disposal of (parts of) a business, various advisors are engaged. M&A advisors assist the buyer or the seller throughout the transaction process. If the transaction takes place via a share deal, the VAT exemption for intermediary services in share transactions (‘intermediation exemption’) could apply.
The scope of this exemption is often subject to debate. Dated case law of the Dutch Supreme Court indicates that the exemption should be interpreted strictly and should not apply where the M&A advisor’s activities extent beyond merely bringing together contracting parties. In recent years, however, lower courts have ruled that the exemption should be applied more broadly (we refer to our news update from 2022).
Policy Decree
The new Policy Decree of 15 October 2025 clarifies the circumstances under which services qualify as ‘intermediary services’ and, thus, when the intermediation exemption applies. According to the Policy Decree, the services of an M&A advisor in share transactions should fall, in any case, within the scope of the exemption if they compromise the following four phases:
- Orientation and introduction phase
- Information and preparation phase
- Negotiating phase
- Contract execution phase
The exemption may also apply if ultimately no transaction is concluded and the services of the M&A advisor do not include all these phases. The Policy Decree further clarifies that intermediary services may exist, even if the contracting parties are already known to each other. Hence it seems not to be required that the M&A advisor himself introduced his client to the counterparty. Additionally, the intermediation exemption may – under certain circumstances – also apply when part of the intermediary services is outsourced by the M&A advisor to a third party. It should therefore be possible for multiple M&A advisors to (indirectly) act as intermediary for the same party in a transaction.
The Policy Decree will enter into force on 16 October 2025.
Our view
The new Policy Decree provides valuable guidance for the M&A practice. It is not only relevant for M&A advisors, but for all parties involved in the acquisition or disposal of shares. We recommend critically reviewing existing and new agreements for M&A services from a VAT perspective to ensure a proper application of the intermediation exemption. Interestingly, the Policy Decree does not include wording on how existing agreements are affected. Some wording on this would have been appropriate.
Questions?
Should you have any questions regarding the above, or would you like to discuss this topic with us? Please feel free to contact us.
