Consultation on the deemed supplier rule for short-term rental and passenger transport

The draft bill introducing the deemed supplier rule for short-term rental and passenger transport by road has gone out for public consultation. We responded on three points that affect practice.

ViDA

On 11 March 2025 the Council adopted the VAT in the Digital Age (ViDA) package. One element is the introduction of the deemed supplier rule for short-term accommodation rental and passenger transport by road from 1 July 2028. The measure is intended to stop people who are not taxable persons, or who apply the small business scheme, from offering accommodation or transport through a platform such as Airbnb, Uber or Bolt without accounting for VAT, while hotels, guesthouses and taxi firms do pay VAT on comparable services.

To remove that distortion of competition, from 1 July 2028 the position in short is as follows: the non-taxable provider makes the supply to the platform and the platform then makes that supply to the ultimate guest or passenger. The landlord or driver owes no VAT on the supply to the platform, but the platform does owe VAT on the supply to the final customer.

The consultation

The bill implementing this element has gone out for public consultation and we responded to it. The three main points from our response follow. All responses can be consulted at internetconsultatie.nl.

Divergent terminology. For short-term rental the Netherlands uses a term that differs from the VAT Directive: immovable property rather than accommodation. As a result the scope of the deemed supplier rule in the bill differs from the scope in the directive. In our view the directive provides no basis for applying the rule to short-term rental of camping pitches (immovable property, but not accommodation), while equally nothing in the directive limits the rule to immovable accommodation.

The exception for the small business scheme in transport. The Netherlands is using the option not to apply the deemed supplier rule where a business applying the small business scheme offers passenger transport by road through a platform. The stated reason is that there is no distortion of competition in the Netherlands in those cases. No supporting analysis is given. In our view that analysis is needed for parliament to take a properly considered decision.

The 30-night limit. It is proposed that from 1 July 2028 the taxed rental of accommodation (21% VAT from 1 January 2026) and camping pitches (9% VAT) be limited to a continuous period of 30 nights. Rental for a longer period, such as a seasonal pitch at a campsite, an extended stay in a hotel or a furnished room for an international student, would then become exempt. The ViDA package does not require this.

An exemption means that VAT on directly attributable costs is not deductible and that VAT on general costs must be split into a deductible and a non-deductible part. From 1 July 2028 it also triggers adjustment obligations for capital goods and services. In our view this measure is undesirable, because it creates a substantial implementation burden for both the accommodation and camping sector and the Dutch Tax Administration.

It is now for the Ministry of Finance to consider, in the light of the responses, whether the draft bill needs to be amended. We are following developments closely.