VAT Exemption For Intermediation In Share Transactions – Dutch Decree

Last week, the Dutch Secretary of State for Finance issued a decree on the VAT exemption for intermediation/negotiation in share transactions ("the Decree"). This is particularly relevant for M&A practice, as significant costs are often incurred by various parties, many of whom may have limited ability to reclaim input VAT. The Decree largely confirms the approach recently applied by the Dutch tax authorities.

Background
Under the EU VAT Directive and Dutch law, negotiation services in share transactions are VAT-exempt. According to European Court of Justice case law, intermediation constitutes performing the acts necessary to enable parties to conclude a sale or purchase agreement. Intermediation is thus a service provided for the benefit of one of the parties, culminating in the conclusion of the contract.