VAT disputes

Organizations are increasingly finding themselves involved in tax disputes with tax authorities. This is happening in the Netherlands, but also elsewhere. As a result of increasing digitalization and a strong European dimension, the VAT practice is becoming more complex and the financial stakes are high.

The VAT practice is facing major changes due to increasing European collaboration and information sharing. Werner Gelderblom explains: “As a result of e-invoicing and e-reporting, in future each invoice will have to be reported to the Dutch tax authorities almost immediately. This will give tax authorities throughout Europe a more precise picture of what you're doing and how you treat each product for VAT purposes.” This requires organizations to change their thinking: from day one you have to know how to invoice and report things.

This development is part of a broader trend, where tax authorities will have an ever-increasing amount of data at their disposal. Gert-Jan van Norden: “This is a game changer for tax and the position of taxpayers.” Moreover, increasing digitalization makes European legal principles even more important. As Werner Gelderblom explains: “These principles are about what we think the legal order should be like throughout Europe. Take, for example, the principle of the right to defense or the principle of proportionality, if all that available data is being used in a manner other than for which it was originally intended. In such cases, the European principles offer additional guidelines to protect the interests of our clients.”

What does this require of organizations and how can they future-proof their VAT position?