The Bottom Line
- Timing is critical: Subsidies for green investments can be entirely denied if your company makes a binding purchase commitment before submitting the official application.
- No exceptions for good faith: A Dutch appeals court has confirmed that even non-profits acting with good intentions will lose out if they fail to follow strict procedural timelines. Mistakenly following rules for individuals instead of businesses is a fatal error.
- Process over purpose: The ruling underscores that subsidy eligibility hinges on precise procedural compliance. The goal of the investment (e.g., sustainability) does not override the requirement to prove the subsidy was a deciding factor, which is demonstrated by applying first.
The Details
The case involved a non-profit foundation that runs a community workshop. As part of a sustainability upgrade, the foundation purchased and installed a new heat pump. Only after the equipment was delivered and paid for did it apply for a national green investment subsidy. The Minister for Climate and Green Growth promptly rejected the application, stating that the investment had already been made. The foundation appealed, arguing it was a non-profit, not a competitive business, and that it had factored the expected subsidy into its budget, thus proving the grant would have a “stimulating effect.”
The Trade and Industry Appeals Tribunal sided firmly with the government, but on a simple, powerful point of procedure. The core of the subsidy framework (the Kaderbesluit) clearly states that costs incurred before an application is submitted are not eligible. The court noted that while the regulations create a specific exception for private homeowners—allowing them to apply after installation—this flexibility does not extend to “zakelijke aanvragers” (business applicants), a category that includes all legal entities, from corporations to non-profit foundations.
This ruling provides a crucial lesson for all business leaders and their legal counsel. The court deliberately sidestepped a complex debate about whether the non-profit qualified as an “undertaking” under EU state aid law. Instead, it relied on an unambiguous national procedural rule. This demonstrates that regulators and courts will often take the most direct path to a decision. For businesses, it means there is no room for interpretation on core procedural requirements. The “apply first, buy later” principle is not a guideline; it is a hard-and-fast rule that determines whether millions in potential funding can be accessed or will be forfeited.
Source
College van Beroep voor het bedrijfsleven
