Under the Dutch VAT Act, the revision of recovered VAT only applies to recovered VAT on capital goods, ie real property and (movable) investment goods. The revision period is five years for movable investment goods and ten years for real property.
The current revision regime for services only covers the (book) year in which the service is used. After this (book) year of first use, the recovered VAT cannot be revised.
Under the new proposal, the revision mechanism for capital goods also applies to services with characteristics that are similar to characteristics of capital goods. This means that for valuable services related to real property, there will be a revision period of ten years, and for other valuable services an adjustment period of five years will apply. Under the proposal, the revision regime applies to services that are amortized for Personal and Corporate income tax purposes. Examples of such services are IT-services, acquired software packages, intellectual property rights, construction services and other services related to real property.
According to the Ministry of Finance, the aim of the proposal is to establish a more equal VAT treatment of goods and services that are considered to be a long term investment. Further, the proposal aims to limit unwanted tax planning schemes.
Besides adjusting their financial systems and VAT compliance procedures, taxpayers will need consider the VAT impact of future investments even more.
It is expected that the proposal will come into force by 1 January 2018.