VAT IN THE NETHERLANDS
When starting a business in the Netherlands, or supplying your goods or services to Dutch customers, you will be faced with the Dutch ‘Value Added Tax’, known as VAT and BTW in Dutch. As a new business in the Netherlands, you must register for VAT purposes. VAT is based upon EU directives, which means that the principles and structure of the tax is the same for all EU countries.
The VAT is known as a general consumption tax and is applied to basically all goods and services in the Netherlands. Essentially the VAT is a so-called consumer tax, but it is to be charged to each invoice issued and received by your company.
There are three different rates of VAT; 0%, 6% (9% starting from 2019) and 21%. There is a very extensive list of goods and services for the different categories. Below, we listed the most common ones:
0% rate applies to:
- International public transportation;
- Export of goods;
- Import of goods.
6% rate (9% starting from 2019) applies to:
- Services for bike repairs;
- Services of hairdressers;
- Public transportation;
- Taxi rides;
The 21% rate applies to:
- Any other service or sold goods.
Some services are exempt of VAT. For instance, the services of composers, writers and journalists.
VAT Transfer regulations
In case you render consultancy and advisory services to clients located outside the Netherlands, special rules may be applicable. In case you render services to a company located outside the EU/EER, no VAT is due. In case you render services to a company located outside the Netherlands, but inside the EU/EER, you can transfer the VAT obligation to your client.
This is only possible if your client has a VAT number in the country of residence. The client’s VAT number needs to be listed on your invoice as well. On your invoice you mention: “VAT transferred to the customer”.
For these types of services, you need to submit a separate VAT return (ICP return) in which you declare the VAT number of your client.
VAT return filing deadlines
Generally, you have to do your VAT returns quarterly. The returns have to be submitted, regardless of the amount of activities. So even in case you didn’t send out invoices yet, the return will still have to be filed. The filing deadlines are:
Q1 -> filing deadline April 30;
Q2 -> filing deadline July 31;
Q3 -> filing deadline October 31;
Q4 -> filing deadline January 31.
These deadlines are not only for filing the return, but also the payments, if due, have to take place before this date. Missing the deadline will result in a penalty. Not only a penalty for late filing, but also a penalty for late payment. It is not possible to extend the deadline for filing VAT returns.
Need help declaring your income to the tax office?
Filing for VAT returns is known as a timely task and many people despise the hard work that goes into the preparation. Broadstreet is happy to assist you with preparation and filing of the VAT returns, as well as with other corporate tax related matters for entrepreneurs new to the Netherlands.