VAT on hospitality
The Dutch VAT charged on the provision of food and drink to persons temporarily present in a catering establishment (e.g. a hotel, café or restaurant) is not deductible neither for the private nor for the business customer. This exclusion from the general right to deduct VAT for businesses even applies when an entrepreneur has hired a catering company providing the food and drink at a special location, such as a boat or a trade fair. The VAT charged on room hire, overnight stays, furnishing of the hall, use of the sound system, reception of guests and suchlike does not fall under this specific deduction exclusion. It is possible however that for the deducted VAT on these costs a correction must be made by virtue of the Dutch Decree on the Exclusion of VAT Deduction (‘BUA’)
Recharging catering costs & VAT deduction
If the provision of food and beverages is outsourced to a business operator who, in turn, subcontracts this service to another business operator, the same service (the hospitality service: the provision of food and beverages) is performed successively.
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