New VAT Regulations in the Netherlands for Cost-Sharing Groups

Written by: Editor

The Netherlands, through the Dutch Ministry of Finance, is imposing new regulations concerning cost-sharing groups, following the European Union’s value added tax (VAT) rules. According to the Article 132(1)(f) of the EU VAT Directive, certain activities that are of public interest can be exempted from taxation. Through this exemption, natural persons can affiliate into a cost-sharing group that will provide the benefit of not incurring additional VAT. Our accountants in the Netherlands can provide tax assistance on the new VAT regulation applicable here. 

What is a cost-sharing group in the Netherlands? 

The cost-sharing group (CGS) refers to an independent entity that can offer to its members the possibility of supplying themselves with specific services exempt from VAT. The CGS is also known as a co-operative self-supply, as referred to by the European Commission.  
It is important to know that the GSC is seen as a different entity that is taxed separately from its members. One of the advantages of the CGS is the fact that the more members the structure has, the lower the costs will be associated with each member and this is a positive aspect for small providers who are not able to acquire assets at an individual level. Our accounting firm in the Netherlands can offer more details on the advantages of the CGS structure
It is important to know that specific business activities can’t benefit from the tax exemption, as it is the case of insurance and financial services providers. 

Who can benefit from the GCS tax exemption?  

Businessmen who are operating on the Dutch market should know that the tax exemption can only be granted for activities that are considered to be of public interest. Under the EU’s regulations, the following activities enter in this category: 
postal services;
professional bodies;
sports and sport competitions;
charity activities – such as fundraising
cultural services
Persons interested in more details on the tax exemptions available in the Netherlands are invited to contact our Dutch accounting firm for consultancy services regarding this subject, as well as for further advice on the CGS ruling.