The Dutch government has released its Tax Plan for 2018, which includes three provisions relating to the VAT law. First is the abolition of the special scheme for agriculture. The government's explanatory memo states that this plan is being abolished because the modernization of farming has led agricultural businesses to more closely resemble other businesses, thus obviating the need for the regime.
Second, the Tax Plan would amend the definition of medicines under the VAT Act. This change is a reaction to a Supreme Court ruling which had interpreted the current definition to include items such as sunblock, which the government states were never intended to benefit from the reduced rate applicable to medicines.
Finally, the tax plan would amend the provisions relating to the zero-rating of the supply of ships used on the so-called high seas for passenger transport to better conform with the EU VAT directive; the current provision is considered overly broad.
