Source: BTW-bulletin, 2018/51
Authors: Irene Reiniers and Floor Weeber
Publication date: June 18, 2018 

In this article the authors discuss the judgment rendered by the Supreme Court on February 23, 2018, in a case concerning a college (hogeschool). The central question in this case was how the right to recover input VAT has to be calculated on general overhead. The Supreme Court ruled that the government grants received by the college do not have to be included in the turnover pro rata calculation for determining the right to recover input VAT on general overhead. The Court also ruled that the Deputy Minister had failed to adequately demonstrate that it was necessary to deviate from the turnover method.

The judgment is a positive outcome for colleges, universities and other educational institutions that perform economic activities and receive untaxed contributions for this.

The authors first outline the case, after which they discuss the qualification of education as an economic activity and the calculation of the right to recover input VAT.