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Dutch Association of Theatres and Concert Halls retracts recommendation after NMa intervention

After an intervention by the Netherlands Competition Authority (NMa), the Dutch Association of Theatres and Concert Halls (VSCD), which is the trade organization for theatres, concert halls and festivals in the Netherlands, retracted its recommendation to its members concerning passing on a VAT increase to theatre visitors. In the eyes of the NMa, the recommendation in question resulted in direct interference with the pricing strategy of VCSD members. Such interference is prohibited under the Dutch Competition Act.

Undertakings are expected to set prices themselves, without consultation with or interference by competitors or trade organizations. Therefore, undertakings should be free to pass on the VAT increase in whole, in part or not at all to visitors. ‘Theatres can differentiate on price. So visitors can see who charges what price, and, on the basis thereof, make an informed decision,’ the NMa says.

The VAT rate for the performing arts is expected to be raised from 6 per cent to 19 per cent as of July 1, 2011. In its so-called ‘Guideline on passing on the VAT increase’ of December 20, 2010, the VSCD advised its members to pass on this VAT increase to visitors. After the NMa had stepped in, the VSCD retracted its Guideline, and informed its members of the retraction. The Guideline has also been removed from the VSCD website. At the VSCD general meeting of May 23, 2011, the importance of complying with the Dutch Competition Act will be emphasized. In addition, the VSCD will draw up a document for its members, explaining the consequences and importance of proper compliance with the Dutch Competition Act. The NMa is satisfied with these steps by VSCD, and has terminated its investigation.