In previous news releases, we have informed you about the VAT measures that are part of the Tax Plan 2025 presented on Budget Day. One proposed measure that has occupied many minds recently concerns the proposed increase of the VAT rate on accommodation, culture and sports to 21% as of January 1, 2026 (instead of 9%). For more information on this proposal, please see our earlier news release.
Meanwhile, the Tax Plan 2025 package was passed by the House of Representatives on November 14, 2024, and is now before the Senate for approval. It is expected that the Tax Plan 2025 package, including this VAT rate measure, will also pass the Senate. This would mean that, contrary to reports in some media that the VAT rate on culture and sports will not be changed, the VAT rate measure will take effect as of Jan. 1, 2026, for now.
The House of Representatives did pass a motion asking the government to present an alternative interpretation for the abolition of the reduced VAT rate for sports and culture in the Spring Memorandum. This seems to take the VAT rate measure for sports and culture off the table. However, there is no guarantee that alternative coverage will actually be found. If no alternative coverage is found, the increase of VAT rate on various goods and services related to culture and sports will still 'continue', as will the increase of VAT rate on lodging.
The Tax Plan 2025 package also contains transitional law on the basis of which the time at which the performance takes place determines the application of the VAT rate. This prevents the application of the 9% rate by means of an advance payment to goods and services that are not delivered until 2026 (and are therefore then taxed at 21% VAT). This transitional law will also take effect for the time being.
Do you receive advance payments for services that will not take place until 2026 to which the reduced rate currently applies and do you have questions about this transitional law? Or do you have other questions regarding these announced changes to the VAT rate? Please feel free to contact us via your relationship manager, by email at btw@govers.nl, or by phone at 040 - 2 504 504. Of course, you can also contact us with all your other tax questions.