Ministries confirm: rules on secondments in inclusive education unchanged

The explanation given in the 2022 Spring Memorandum turns out to be wrong: EU rules have not been tightened. Schools that wrongly charged VAT can correct it.

A passage in the 2022 Spring Memorandum caused confusion in May of that year. It stated that partnerships for inclusive education would be compensated for the VAT burden on staff seconded by schools to those partnerships, and vice versa. The reason given was that these secondments had previously been exempt but that this was no longer possible because EU rules had been tightened.

Later communications from the national support centre for inclusive education and the secondary education council gave a different reason. According to the ministries of Finance and Education, the exemption was no longer available because of the December 2018 decree on seconding staff, in other words national policy. That decree provides that secondment in the social sector is only exempt where not only the hirer but also the lender applies the exemption for social activities. That condition is not met here: partnerships apply the exemption for social activities, schools the one for education.

We said at the time that this reasoning was too blunt, because it wrongly assumed that applying a different exemption means secondments by schools to partnerships must be subject to 21% VAT.

No tightening after all

Talks have since taken place between the ministries of Finance and Education and various parties involved. Following those talks, the support centre reports that the explanation in the Spring Memorandum turns out to be incorrect: EU rules have not been tightened.

Apart from the 2018 change to the decree, the rules on VAT and secondment have remained unchanged. The VAT compensation for partnerships from 1 January 2022 made no further difference to how the rules work.

What to do

Because of the messages from the ministries and the support centre, schools may have felt obliged to charge 21% VAT on secondments to partnerships. Now that it is confirmed this was unnecessary, that VAT can be corrected. Schools that continued to apply the exemption over the past year can carry on doing so, provided the conditions were and are met.