This morning my colleague and I had an appointment with a potential new client. We met in a Grand Café and we ordered tea and coffee. At the end of the meeting I got the receipt and I paid for the drinks with my company card. In addition to the total amount, the receipt also stated 9% VAT. I scanned the receipt and sent it to my bookkeeper.
I am used to deducting all the VAT that I see on my receipts and invoices, but my bookkeeper indicated that the VAT on catering was not deductible. He indicated that the VAT is only deductible if it concerns a business expense. This is never the case with catering expenses. The Belastingdienst (The Dutch Tax Authorities) states this explicitly. The question remains why does the Grand Café mention the 9% VAT at all? Wouldn’t it make more sense not to mention any VAT at all on the receipt? After all, the VAT is not deductible. A catering entrepreneur is not even obliged to provide a receipt for drinks sold. He only issues a receipt out of customer friendliness. But as far as I’m concerned, he can omit the VAT on the receipt.
By the way
Although the VAT on catering consumption cannot be set off, the costs you incur are of course deductible from the profit of your company. Limited, admittedly; for sole proprietorships this is 80% and for a BV 73.5%.