Dutch Tax Administration launches a site for foundations and associations

The new portal helps board members get to grips with their tax obligations. Whether the VAT information reflects every organisation's position correctly is another matter.

The Dutch Tax Administration has launched a dedicated website where foundations and associations can go with their tax questions. The portal is designed to give board members information and tools.

Presented as the place to get comfortable with tax matters, the site sets out the life cycle of a foundation or association and offers a check on whether the organisation is liable for VAT, payroll taxes and corporate income tax. Separate pages are devoted to particular topics such as record-keeping and the small business scheme.

Our reservations

In our view it is questionable whether all the information on the site always reflects an organisation's VAT position correctly.

An association that enters in the VAT check that it charges members a subscription is told that it may have to file VAT returns and should contact the tax authorities. That is in line with current policy, but in our view possibly at odds with recent case law.

The frequently asked questions also address whether VAT must be charged when a payment is received from a sponsor. The answer given is that this depends on whether the sponsor gets something in return. In our view that is too blunt: getting something in return is not in itself enough to conclude that a supply is taxable, because there must be a direct link between the payment and what is supplied.

In short, the portal is a helpful step towards board members who are unaware of their tax obligations, but at the same time it raises the question whether organisations using these tools may end up within the scope of VAT when they should not.