• Service: Tax, Global Indirect Tax
  • Type: Regulatory update
  • Date: 5/16/2014

Netherlands - VAT on fees concerning bank’s extension of credit 

May 16: The district court in The Hague issued a judgment concerning value added tax (VAT) on the re-charged fees related to a bank’s use of an external advisor in connection with providing loans to a partnership (one of the bank’s customers).

In the court’s opinion, the re-charging of these fees qualified as a VAT-exempt extension of credit, and thus, no VAT is payable.


A general partnership (vennootschap onder firma or VOF) was in financial difficulty and engaged a bank to prepare a rescue-and-finance package that resulted in credit being provided.

The bank engaged an advisory firm to provide legal services. The advisory firm charged the bank for its services, and the bank, in turn, re-charged these fees (including Dutch VAT) to the VOF.

The tax inspector rejected a claim filed by the bank for a refund of the VAT that had been charged to the VOF.

The district court of The Hague concluded that the bank only provided one service to the VOF, and that this service qualified as a VAT-exempt granting of credit. The bank therefore incorrectly charged Dutch VAT on the invoice it issued to the VOF.

Read a May 2014 report prepared by the KPMG member firm in the Netherlands: Decision Dutch District Court on VAT treatment consultancy fees recharged by banks for granting credit

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