An entrepreneur who has a branch in another country may have a fixed establishment there. Having a fixed establishment has possible VAT implications. For example, you may have liability for VAT and with that there are invoicing and administrative requirements that must be satisfied, such as the requirement to file VAT returns. But you may also be able to deduct or get a refund VAT. As well, you would have to pay particular attention to the services you provide to third parties and the services you purchase from third parties to determine where they are subject to VAT and whether you are liable for the payment of VAT. If you have a fixed establishment for VAT purposes this may also affect VAT grouping and your VAT position as regards international trade.
At the end of 2020, the State Secretary of Finance published a new decree related to the VAT implications of having a fixed establishment. The attached article covers the topics mentioned above.
Madeleine Merkx
madeleine.merkx@bdo.nl
Anne Janssen
anne.janssen@bdo.nl