A Dutch court has ruled that a commercial STI and HPV testing service qualified for the medical VAT exemption. The test kit, laboratory analysis and result communication formed one economic service. The ruling affects how testing firms assess invoices, costs and margins.
Why this matters
An exemption changes the customer invoice and the cost file. A qualifying care invoice carries no VAT, but VAT on costs for exempt work may not be deductible. Laboratory bills, software, marketing, premises and external support can cost more. Businesses with exempt and taxable sales must split VAT on shared costs. Contracts, invoices and ledger codes must match the service delivered.
Example
A testing company sells packages to consumers, employers and insurers. A consumer orders a test to identify an infection and obtain care if needed. An employer may order a report for its own decision. Those orders may have different VAT treatment. If consumer testing is exempt, the company cannot deduct VAT on directly related costs. Finance must also split VAT on shared software and premises. Otherwise, the VAT return and margin report may be wrong.
XTROVERSO tips
- Map every revenue stream. List testing, sample collection, laboratory analysis, clinical follow-up, platform access, administration, staff supply and third-party reports separately. Record the customer, purpose and current VAT code for each service.
- Match the contract to the care pathway. Check the order form, customer terms, consent record, laboratory agreement and clinical workflow. The file should show the promised service, clinical responsibility and route from sample to result.
- Separate third-party work. Review work for employers, insurers and other commissioning parties separately. Establish whether the order provides care for the individual or a report for the third party.
- Recalculate the real margin. Include non-deductible VAT from laboratory bills, software, marketing, equipment and support in the cost of each test. Then check whether the current price still covers that cost.
- Add VAT to monthly controls. Report exempt revenue, taxable revenue, direct costs and shared costs each month. Check that invoice wording and ledger codes support the VAT return.
Want to check whether your contracts, invoices and VAT records match the service you deliver? Talk to XTROVERSO
The data, sourcing, and analysis behind this article were conducted by Paolo Maria Pavan. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Paolo Maria Pavan before publication.
References
- Rechtspraak — ECLI:NL:RBDHA:2025:1165
- Belastingdienst — VAT exemption for diagnostic and preventive healthcare
- Belastingdienst — Third-party testing and the healthcare chain
- Belastingdienst — Contractual position in multi-party care arrangements
- Belastingdienst — Ledger separation and input-VAT consequences
- Belastingdienst — Input VAT on mixed taxable and exempt turnover
- Wettenbank — Statutory and policy framework for the medical VAT exemption
