What are the VAT consequences of subsidies?

The VAT treatment of subsidies depends on whether there is consideration for an identifiable service. If so, the subsidised activity is taxable for VAT. Depending on the service, it may actually be taxed or exempt (for example under the healthcare exemption). If the subsidy is a contribution without anything in return, it falls outside the scope of VAT. The assessment is case-specific and requires careful analysis of the subsidy conditions.

Can we deduct the VAT on our investments?

That depends on the extent to which you carry out taxed services. If you have exclusively exempt activities, no input VAT deduction is possible. If you carry out a mix of taxed, exempt and/or non-economic activities, partial deduction is possible based on a (pre) pro rata calculation. We help you set this up optimally.

How does VAT apply to the secondment of staff?

The secondment of staff is in principle a taxed service for VAT purposes, including between non-profit organisations. Specific rules and exemptions apply, depending on the nature of the organisations and the type of staff. We are happy to advise you on the correct treatment, to prevent unnecessary VAT.

What will change with the new European VAT rules for non-profits?

The European Commission is working on modernising the VAT rules, including possible changes to the exemptions for the public sector. We follow these developments closely and inform our clients in good time about the consequences for their organisation.

Non-profit

VAT expertise for non-profit organisations

Non-profit organisations operate in a distinctive VAT landscape, with its own exemptions, exceptions and points of attention. VAT INSTITUTE helps foundations, associations, healthcare and educational institutions and cultural organisations get a clear picture of their VAT position, so more remains for your mission.

Get in touch

— 01

VAT advice for non-profits

Understandable advice on the VAT status of your activities, the application of exemptions and the consequences for your right to deduct.

— 02

Subsidies and VAT

Analysis of the VAT consequences of subsidy flows, partnerships and public-private arrangements, to prevent unforeseen and unwanted VAT charges.

— 03

Compliance and review

Periodic review of your VAT position, support during audits and practical improvement of your administrative processes.

All subsectors: From healthcare and education to culture, sport and charities: we know the VAT rules for every subsector.
Exemptions and their limits: Specialist knowledge of the VAT exemptions and their limits, so you know where your room for manoeuvre lies.
20+ years: For more than two decades we have advised non-profit organisations on their VAT position.

Non-profit and VAT: more complex than it seems

Many non-profit organisations assume that VAT is barely relevant to them. The reality is more nuanced. Most organisations carry out a combination of untaxed and taxed activities, and the line between them is far from always clear. Subsidies, partnerships, secondments, catering, letting of spaces, fundraising campaigns and the operation of shops or web shops: all of these activities have VAT consequences.

VAT INSTITUTE helps you map out your VAT position in full. We analyse which activities are exempt, which are taxed and which fall outside the scope of VAT, and what that means for your right to deduct input VAT. Where possible we make use of the room the rules provide, with full compliance as the starting point.

From subsidies to partnerships: the consequences in view

The VAT treatment of subsidies is a recurring question. Whether a subsidy constitutes consideration for a service (on which VAT may be due) or a contribution without anything in return (which falls outside the scope of VAT) depends on the specific conditions and relationships.

The same goes for partnerships, cost-sharing structures and shared service centres. We help you understand the consequences and choose the right structure, in language your board and your supervisory body understand too.

Understanding of non-profit dynamics

Non-profit organisations operate in a different context than the business world. Social objectives, public accountability and limited resources place their own demands on the advice. We understand that context and tailor our advice accordingly.

Specialist knowledge of exemptions

The VAT exemptions for non-profit activities are numerous, but they have limits too. We know the conditions, the exceptions and the current case law. That way you know exactly what the exemption covers and what it does not.

Proactive and preventive

Many VAT problems in the non-profit sector arise because organisations do not seek advice in time for new activities or forms of collaboration. We are happy to think along at the front end, so you are not faced with surprises afterwards.

Knowledge base

Latest news

Current developments and practical insights in the field of VAT for non-profit organisations, healthcare institutions and social organisations.

Visit the knowledge base

News 11 May 2026

Are typing courses vocational training?

The scope of the education exemption regularly raises questions. The District Court of Gelderland recently ruled on typing courses and made clear that registration in the vocational training register is not enough on its own.

From practice 18 November 2025

Charity shops and VAT

Sales of second-hand goods are usually dealt with under the margin scheme, so that VAT is not charged more than once on the same consumer item. Where goods are donated, that purpose turns out to be missed in practice.

News 16 September 2025

Tax Plan 2026: reduced VAT rate for culture, media and sport retained

The harvest of VAT and transfer tax proposals is thin this year. The substantial Tax Plan 2026 package contains a single substantive VAT measure, and it is good news for culture, media and sport.

FAQ

Frequently asked questions

Is your question not listed? Feel free to contact us, we aim to respond within one business day.

That depends on the activities. Many non-profit organisations carry out taxable services alongside their exempt core activities, such as letting, catering or the sale of goods. As soon as there are taxed activities, VAT liability arises. We assess your specific situation and advise on the consequences.

Other sectors

Transport & logistics Passenger transport Advisers Trading companies E-commerce Real estate

Certainty starts with a conversation

Schedule a meeting with one of our specialists and get clarity on your VAT matters. We will help you find the best approach for your specific situation.