On 20 February 2026, the Dutch Supreme Court ruled in ECLI:NL:HR:2026:281 on how a market maker can calculate its VAT deduction on mixed costs.
The case
A Dutch VAT group included a company that acts as market maker on exchanges inside and outside the EU. Its services are financial services. It can deduct input VAT only to the extent that its customers are established outside the EU. There was a dispute about the deduction on costs used for both deductible and non-deductible activities.
The ruling
The Court of Appeal should have dealt with the position taken by the group, and the case goes to the Court of Appeal of The Hague. That court must apply three points.
Gross trading result. In First National Bank of Chicago (C-172/96), the taxable amount of foreign exchange transactions without separate fees was the gross result over a period. If the circumstances of securities transactions are comparable, the same applies by analogy.
Evidence. The burden of proof rests on the business claiming the deduction. EU law and Dutch law have no special rules of evidence on where a customer is established, so the business may put forward anything available to it.
Estimates. Where it is not possible to establish each customer's location on objective data, the ratio of customers inside and outside the EU can be shown in other ways. That can include reasonable estimates, provided the data used are accurate, reliable and up to date.
The share of fees attributable to customers outside the EU then counts towards the deduction.
What to check
- Financial businesses with deductible services to customers outside the EU should document the basis for their ratio.
- An estimate needs data you can defend. Keep the source and date of what you use.
- Agreements with the tax authority can run out. In this case, the deduction after such an agreement ended had to follow the statutory rules.
mr. J. el Khalfioui LL.M.