Withdrawal of VAT Exemption on Telecommunication Activities

KPMG comments on the withdrawal of Dutch VAT-exemption on telecommunication activities

This is contribution number 30 by KPMG Meijburg & Co regarding withdrawal of Dutch VAT-exemption on telecommunication activities.

With effect from 1 January 1996 the existing exemption of telecommunication supplies by the Dutch PTT telecom company will be withdrawn. This will also have VAT consequences for employers that supply their employees with telecommunication facilities. If these facilities are provided free of charge, the employer in principle cannot deduct any input-VAT related to private use of the facilities by the employee. If the employer charges a consideration to the employee for private use of the facilities, the employer is liable to VAT on this consideration starting from 1 January 1996.