This judgment is not only important for the insurance of seagoing vessels, for which an exemption applies in the Netherlands, but also for the insurance of other vessels, which are subject, as starting point, to 21% insurance premium tax in the Netherlands.
The Supreme Court based its conclusion on a formal interpretation of the term ‘interest’ in the Legal Transactions Taxation Act and thus ruled differently to the Court of Appeals ‘s-Hertogenbosch, which, on January 24, 2020, had accorded an economic meaning to the term ‘interest’.
This judgment could put pressure on the Dutch practice, where a combination of mediation and other services closely related to insurance that are performed as a single supply are regarded as fully VAT-exempt.
On March 12, 2021 Bart Snels, Lower House Member of Parliament for the Greens (GroenLinks), published the Memorandum in response to the Report and a supplementary Memorandum of Amendment with regard to his private member’s Bill ‘Emergency Act on the Conditional Final Settlement of Dividend Withholding Tax’, which had been presented to Parliament on July 10, 2020.
The Danske Bank judgment differs from Dutch practice. This judgment could have major implications for the VAT treatment of intra-group services, in particular if there is a limited VAT recovery right.
On March 4, 2021 the Deputy Minister of Finance launched, among other things, a public internet consultation on the taxpayer status measure for ‘reverse hybrid entities’ and several related accompanying measures including for the purposes of dividend withholding tax and the withholding tax on interest and royalty payments.