Netherlands VAT

The main Dutch VAT legislation can be found in the Wet op de omzetbelasting 1968 (" The VAT Act ") as well as the Exclusion order transposing the EU VAT Directive into law and various other ordinances. It harmonised the system with the rest of the European Union in 1979. The Dutch VAT law is included in the general tax law, which is administered by the Dutch Tax Office and is based on the original Dutch VAT Law with subsequent administrative decisions and rulings.

 

VAT has been harmonised across EU member states, including the Netherlands. VAT is a general consumption tax that is fiscally neutral. For these directives, each country applies tax exemption and VAT rates according to its requirements. As part of the European Union, the Netherlands complies with laws or VAT directives set by the European Commission in Brussels.

 

Dutch VAT is based on rules set by the European Union; This includes details of VAT registration and VAT declaration in the Netherlands, as well as other VAT compliance issues. However, VAT rates in the Netherlands are still set by local authorities.

 

VAT, known in Dutch as Belasting over de Toegevoegde Waarde or btw, applies to the supply of goods and services offered in the Netherlands as well as to the import of goods and purchases of goods "within Europe".

 

Any non-resident trader supplying goods in the Netherlands may face obligations to register Dutch VAT, comply with local laws, complete Dutch tax refunds, Intrastat and other declarations.

 

Netherlands VAT registration

Should you register for Dutch VAT?

There are a number of trading situations which typically require a foreign business to register with the Dutch tax authorities.  These follow the broad EU VAT rules, and include:

• Importing into the EU through the Netherlands, although there are some limited liability fiscal representation schemes which can be used instead
• Buying and selling goods in Netherlands if the customer is not Dutch VAT registered (if they are, then reverse charge applies, and no registration is required).
• Holding goods in consignment in the Netherlands – special licenses may be used instead.
• Selling goods on the internet to Dutch private individuals
• Holding live exhibitions, events or training in Netherlands.
• If a company is otherwise a non-VAT trader, but is receiving services in Netherlands under the reverse charge rule.
• The self supply of goods.

 

There is a very limited requirement to VAT register non-resident companies if they are providing services.  This follows the 2010 VAT Package simplification.

 

Note that providers of electronic, broadcast or telecoms services to consumers in the Netherlands only have to VAT register in one EU country under the MOSS scheme to file a single return covering all 27 member states.

 

VAT rate

There are three VAT rates, which are 21, 9, and 0 per cent.The standard VAT rate is 21 per cent.The reduced 9 per cent VAT rate is applicable on certain prime necessities, on certain energy-saving insulation activities on houses and also on certain e-publications. The special 0 per cent VAT rate is applicable mainly to intra-EU supplies, supplies of goods exported to outside the EU, supplies of goods placed in bonded warehouses, services rendered in connection with the above, and certain international services.

 

The following domestic transactions are exempt from VAT:

 

• The supply of immovable property two years after putting it into use and lease.   However, if the lessee’s use of the immovable property is 90 per cent or more for input VAT-deductible purposes, the lessor and lessee may opt to be subject to VAT on rent, in which case the lessee may deduct the VAT charged in respect of the property.
• Medical, cultural, social, and educational services.
• Services provided by banks and other financial institutions in connection with payment transactions and the granting of credit facilities.
• Insurance transactions.
• Certain transactions in shares by controlling active parent companies and  transactions by commercial share dealers.

 

Effective 1 January 2020, the Netherlands implemented the ‘EU four Quick Fixes’ aiming to improve the day-to-day functioning of the VAT system for EU cross-border B2B trade.These Quick Fixes concern: the use of the VAT identification number, call-off stock, proof of transport and chain transactions.The changes have consequences for the administrative systems, VAT registrations, contracts, (electronic) documents and invoices of entrepreneurs.

 

Effective 1 July 2021, the Netherlands implemented the EU VAT rules applicable to cross-border business-to-consumer (B2C) e-commerce activities.

 

Due to the international energy situation, the Netherlands lowered the VAT rate on natural gas, electricity and district heating from 21 per cent to 9 per cent as of 1 July 2022.   This scheme will expire on 1 January 2023.

 

As of 2023 the zero VAT rate applies to the supply and installation of solar panels and solar panels used as roofing materials.   The zero VAT rate only applies if the solar panels are intended to be installed on or in the immediate vicinity of private dwellings or housing.

 

Rate	Type	Good or Services
21%	Standard	All other taxable goods and services
9%	Reduced	Foodstuffs (including grains and pulses). Seedlings for the cultivation of vegetables and fruits. Cattle, sheep, goats and pigs, and other animals which are intended for the cultivation or production of the foodstuffs, agricultural use, and for breeding those animals. Eggs for hatching poultry. Certain medicines, contraceptives, infusion fluids, kidney dialysis concentrates, inhalation gases intended for medical purposes, bandages (including filled bandage boxes), and women’s sanitary products. In some cases, marketing authorization is required for the product for the reduced rate to apply. Certain veterinary medicines. Water. Certain works of art, antiques, and collectors’ items on importation into the Netherlands. Books (including e-readers), digital educational material, and periodicals appearing at least three times a year, as well as the hiring out of these. Various aids and appliances for the blind and visual impaired, as well as the repair of these. Various aids and appliances intended for people who are hindered by a chronic illness or disability (e.g., invalid carriages and crutches, artificial limbs, heart and muscle stimulators, custom-made orthopedic corsets), as well as the repair of these. Several fuels for the heating of horticultural products. Various repairing services (e.g., bicycle, footwear, leather goods, and clothing). The provision of accommodation and foodstuffs by various areas of the hospitality industry. Admission to circuses, zoos, public museums, exhibitions, cinemas, sports events, fairgrounds, playgrounds, and ornamental gardens; and
0%	Zero	Goods originated outside the Netherlands and have not yet been imported. Certain exports (e.g., goods exported outside the EU by taxable persons, provided they are not destined for the provision of means of transport in the Netherlands). Intra-Community supplies of goods that are transported to another Member State and subject to taxation in the Member State of arrival as an intra-Community acquisition of goods. Goods held under the customs warehousing regime. Vessels and aircraft meet certain requirements. (For more information, see Note below). Gold intended for central banks. Excisable goods in an excise warehouse. Intra-Community supplies of goods (see Note below). Goods which are brought to, or which are in a VAT warehouse. Certain services in connection with the importation of goods. Passenger transport by means of sea vessels or aircraft if the place of destination or departure is situated outside the Netherlands. Certain services supplied by brokers and other intermediaries, acting in the name and for the account of another person. Inward processing services; and Intra-Community transit of commodities to and from the Azores and Madeira and inter-island transportation.

 

 

VAT return

Any company registered with the Dutch tax authority as a non-resident VAT trader is required to report taxable transactions through periodic returns, known as tax returns.

How often do I need to declare?

In the Netherlands, the standard VAT return period is quarterly. If a business has to pay VAT of more than €15,000 per quarter, it will need to declare it every month. In addition, companies may be required to file monthly returns if they frequently delay paying VAT. Resident enterprises with an annual tax rate of less than €1,883 and an intra-Community supply and acquisition value of less than €10,000 need to declare once a year.

What can be deducted?

The Company may offset the VAT on sales or output declared in the Dutch VAT return with the corresponding VAT on imports or purchases. There are some exceptions including: certain staff benefits (sports and recreation facilities, accommodation, private transport, provision of food and beverages), catering industry and restaurants.

When is the deadline for filing VAT returns?

Any Dutch monthly or quarterly VAT declaration shall be made on the last day of the month following the end of the period. For companies filing annual VAT returns, the deadline is March 31 of the following year. Foreign companies can file tax returns within eight weeks of the end of the relevant tax period.

 

Any Dutch VAT due must be paid in euros within the same period applicable to VAT returns. Payment can be made electronically.

 

VAT compliance

If a foreign company is liable to account for Dutch VAT, and has obtained a VAT number, it must then comply with the local VAT rules.  This covers:

 

• Preparing invoices with the disclosure details outlined in the Dutch VAT law.
• Electronic invoices with proper signature, authenticity and agreement by the recipient.
• Maintenance of accounts and records, which must be held for at least 7 years.
• Correct invoicing of customers for goods or services in accordance with the Dutch time of supply VAT rules.
• Processing of credit notes and other corrections.
• Use of approved foreign currency rates.

 

 

VAT recovery

The Dutch VAT Act provides that VAT paid by a taxable subject on supplies supplied to it, on purchases of goods affected by it within the community, and on import VAT (known as "input VAT") arising from imports of goods to that taxable subject may reduce the total VAT payable over a period of time.

 

The VAT difference (plus or minus) between the VAT levied on its supplies and its input VAT credit is the VAT owed (or refunded) by the taxable person for each tax period.

 

For input tax to be used as a credit, the following general conditions must be met:

• All transactions must be accompanied by appropriate invoices and receipts as proof of transaction and for calculating the amount.
• The claimant, whether the recipient of the supply or the recipient of the goods, must be a taxable person.
• VAT shall be part of the claimants' taxable supplies, including zero-rate supplies.
• All supplies should be paid for the claimant's business.

 

Deduction limit

In most cases, VAT cannot be deducted if it has been paid for products or services purchased for non-commercial purposes or for duty-free supplies. However, there are some exceptions. For example, VAT paid on expenditure related to some duty-free goods offered to consumers outside the EU is recoverable.

 

VAT generated in restaurants, bars and similar facilities serving food and drink is not recoverable. Section 16 of the VAT Law prohibits the refund of VAT on the purchase of goods or services for the following purposes:

 

• Payment to an employee in the form of goods or services.
• An expensive purchase intended to enhance one's status.
• Products given as promotional gifts to people who cannot claim VAT on their own.
• In most cases, VAT refunds should be declared within the period in which the invoice claiming the deduction appears.
• Assume that a VAT refund cannot be claimed during the above period. In this case, the taxpayer must file a supplementary VAT return, which changes the initial tax return for that period. Supplementary VAT returns need to be filed electronically.

 

Invoice Requirements

In order to claim input tax credits, businesses in the Netherlands need to issue VAT invoices. A taxpayer must issue a VAT invoice for each good or service provided to another VAT registered entity. Invoices can be issued by suppliers or representatives of goods or services, and sometimes even by recipients, depending on the type of supply.

 

The Dutch VAT provisions on invoice format and information are generally in line with the EU VAT Directive and its obligations under VAT invoice requirements.

 

The Dutch VAT invoice must be issued before the 16th of the following month in which the taxable supply occurs. Invoices must be kept for 7 years. Like all EU member States, the Netherlands now allows the use of electronic invoicing under certain conditions.

 

Dutch invoice requirement

The invoice must contain at least the following basic information:

• Date of issue
• A unique, consecutive number
• Supplier's VAT number
• Customer's VAT number (in some cases)
• Detailed address of supplier and customer
• A detailed description of the goods or services provided
• Details of quantity of goods (if applicable)
• If the date of delivery differs from the invoice date, indicate the date of delivery
• Net taxable value of supply
• Applicable VAT rates and VAT amounts
• Support zero VAT details - export, reverse charge or in-community supply
• Total amount of invoice