Postcorona and times of much uncertainty. The need for connection with your team is greater than ever this moment. Then on top of that comes the war for talent. You took the right decision to organise a team building event for your staff. But what about the VAT on the costs incurred? Can you recover it as a company? What are the points of interest?
When can you recover VAT on a team building?
A lot depends on whether or not the whole company is invited. If a teambuilding is organised for a particular department, then it is a ‘private social benefit’ and VAT is not deductible. If all staff members are invited, then it is a ‘collective social benefit’ and VAT on the related costs can be recovered. If retired employees also participate, VAT on those costs is not recoverable.
However, it is not required that all staff members actually participate in the team building. They must be given the opportunity to do so and thus be invited. If only a certain department takes part, it is important to be able to prove that everyone was invited. From an HR point of view, it is also best if the whole company takes part.
Sometimes it can be attractive to also involve the partners of your employees, especially if you expect a lot of flexibility from your staff. You therefore also invite them to the team building. According to the courts, the VAT on this is also deductible.
Incentives
In recent years, most companies prefer to organise fun outings with staff several times a year. Nevertheless, some companies still insist on multi-day team building events. Although VAT is recoverable on these, bear in mind that they are not tax deductible in direct taxes.
Exceptions
Team building catering is an exception. Even if a teambuilding is for staff only, VAT on catering is in principle not deductible. If a caterer or the event company provides the preparation and service, or you go out to a restaurant, VAT on these costs is not recoverable. But if, with a view to the event, you buy the food items yourself and the staff themselves stand in for service or the party is held under a self-service formula, then it is no longer a restaurant service, but a mere supply of goods. In other words, the general ban on deducting restaurant expenses does not apply then either. If the other conditions are met, you can recover the VAT on those costs. VAT on spirits is never deductible.
So in principle, VAT is also deductible if a caterer delivers the meals ready-made, with no other services besides transport. In that case, it is therefore only delivery.
Summary
VAT on team building is recoverable under the normal rules if it is a collective social benefit. This is the case if everyone from the company is invited.
Case law accepts that partners and resident family members are also invited along.
VAT on catering services is also recoverable if the caterer delivers ready-made meals without any additional services.
Want to know more about tax- and VAT-friendly teambuildings for your company? Check out our formulas involving all your cow colleagues!
Originele teambuildingactiviteiten voor bedrijven om de kuddegeest te versterken – Farmfun
