Netherlands consulting on the platform economy component of ViDA
Netherlands consulting on the platform economy component of ViDA
As has been widely reported, the EU ViDA initiative brings transformative change to the VAT rules throughout the EU. The Dutch government recently launched an online consultation on the implementation of the VAT rules relating to the platform economy. The consultation provides insight into the contours of the future legislation. Notably, the Netherlands intends to be an early adopter of the rules. This article looks at the most notable points of the proposed legislation.
Based on the proposal, the Netherlands intends to implement the deemed supplier rule on 1 July 2028, the earliest possible date (the measures must be implemented into domestic law of the EU member states no later than 1 January 2030). The Netherlands has also chosen to exercise the option not to apply the deemed supplier rule when the service provider uses the small enterprise scheme (SME scheme) in the case of passenger transport by road. The government believes there is no distortion of competition between businesses using the SME scheme and businesses applying VAT in this sector. As a result, drivers that apply the SME scheme would not have to charge VAT on their services, nor would the platform.
The proposals under consultation indicate that the Netherlands intends to limit the exception to the rental exemption, effective 1 July 2028, to an uninterrupted stay by the same person for a maximum of 30 nights. This same period would also apply to the reduced VAT rate for providing camping facilities. As from 1 January 2026, the reduced rate no longer applies to the provision of accommodation in a hotel, guesthouse and vacation rental.
This measure would impact hotels, guesthouses and campsites where guests stay for more than 30 nights. Currently, these services are subject to VAT for stays of up to six months but starting 1 July 2028, stays of 31 nights or more would be exempt from VAT. In our view, the Netherlands has interpreted the directive provision too narrowly, and the distinction between rentals of up to 30 nights and those exceeding 30 nights may also conflict with the neutrality principle.
Deemed supplier rules
Under the deemed supplier rules in ViDA, platforms will be responsible for paying VAT on short-term accommodation rentals and passenger transport by road in certain situations. Affected services include those offered through platforms, such as Airbnb and Uber. Platforms that facilitate supplies of short-term accommodation and passenger transport will become responsible for collecting and paying VAT to the tax authorities unless the person offering the services notifies the platform that they will submit the VAT themselves and provides their VAT identification number (or One Stop Shop identification number). In other words, the liability for VAT will shift from the underlying provider of the services to the platform unless the provider is VAT-registered and accounts for the VAT. This shift in liability is designed to level the playing field between small, often non-VAT-compliant providers and larger, professional accommodation businesses.Based on the proposal, the Netherlands intends to implement the deemed supplier rule on 1 July 2028, the earliest possible date (the measures must be implemented into domestic law of the EU member states no later than 1 January 2030). The Netherlands has also chosen to exercise the option not to apply the deemed supplier rule when the service provider uses the small enterprise scheme (SME scheme) in the case of passenger transport by road. The government believes there is no distortion of competition between businesses using the SME scheme and businesses applying VAT in this sector. As a result, drivers that apply the SME scheme would not have to charge VAT on their services, nor would the platform.
Rental exemption
A notable aspect of the proposed measures is the government’s interpretation of the exception to the rental exemption. The rental of real estate in the Netherlands is generally exempt from VAT although there are several exceptions to this rule, including one for the rental of accommodation in the hotel and holiday home sectors. Currently, this exception applies to stays of up to six months, provided the tenant has not transferred the center of their social life to the property. For rentals that exceed six months, the burden of proof falls on the landlord to demonstrate to the tax authorities that the stay is for a short period.The proposals under consultation indicate that the Netherlands intends to limit the exception to the rental exemption, effective 1 July 2028, to an uninterrupted stay by the same person for a maximum of 30 nights. This same period would also apply to the reduced VAT rate for providing camping facilities. As from 1 January 2026, the reduced rate no longer applies to the provision of accommodation in a hotel, guesthouse and vacation rental.
This measure would impact hotels, guesthouses and campsites where guests stay for more than 30 nights. Currently, these services are subject to VAT for stays of up to six months but starting 1 July 2028, stays of 31 nights or more would be exempt from VAT. In our view, the Netherlands has interpreted the directive provision too narrowly, and the distinction between rentals of up to 30 nights and those exceeding 30 nights may also conflict with the neutrality principle.
