VAT in the Netherlands – a complete guide. Rates and registration thresholds | VAT in Europe #4

VAT in the Netherlands

The Dutch Value Added Tax (VAT) system was introduced in 1968. Ten years later, in 1979, this system was harmonized with the systems known in the other member states of the European Union. It is managed by the Dutch Tax and Customs Administration and is based on the previous Dutch VAT law, as well as on subsequent amended administrative decisions and rulings.

Every business that is not registered as a local tax resident may be subject to the obligation of registration in the Dutch tax system. Additionally, foreign companies are under a constant obligation to comply with local regulations, submit declarations, adhere to the Intrastat system, and various other declarations. However, the principle of reverse charge is commonly applied, as well as systems for deferring the payment of VAT on imported goods.

Should you register for Dutch VAT?

Certain trade situations typically require foreign entrepreneurs to register with the relevant Dutch tax authorities. They fully comply with the general European Union VAT regulations and include:

• Import through the Netherlands to other EU countries (although it should be noted that various limited liability fiscal representation systems can be applied interchangeably),
• purchase and sale within the country when the customer is not registered in the Netherlands as a VAT payer (if registered, reverse charge applies, and registration is not required),
• consignment storage of goods in the Netherlands – alternatively, a special license can be used,
• online sale of goods intended for private individuals after exceeding the statutory limit,
• organization of live exhibitions, events, training, conferences (admission fee payable at the entrance),
• delivery of goods at one’s own expense.

The requirement for VAT registration for companies that are not local tax residents is very limited when they are involved in providing services.

What are the VAT registration thresholds in the Netherlands?

Foreign businesses trading in the Netherlands and simultaneously registered as VAT/GST payers in their own countries are subject to a zero registration threshold.

Is a Dutch fiscal representative or agent required?

If a company is based in another EU member state, it doesn’t need a local fiscal representative/agent to register for VAT in the Netherlands. They can register directly with the Dutch Tax Office. However, for companies operating outside the EU, a fiscal representative responsible for Dutch VAT is required by the Tax Office.

What information is required to obtain a VAT number and registration in the Netherlands?

The Dutch tax office will require the completion of the appropriate forms and the submission of the following documents:

• VAT certificate to prove that the company is registered as a VAT taxpayer elsewhere,
• company’s articles of incorporation,
• excerpt from the company’s trade register.

What is the format of the Dutch VAT number?

Immediately after the registration is granted (which usually takes less than two weeks), a unique Dutch VAT number is assigned to the company. Each of the European Union member countries has a defined format for its VAT number. In the case of the Netherlands, it consists of 9 digits and the prefix NL.

Country code: NL

Format: 123456789B01 or 123456789B02

Number of characters: 12. The tenth character is always the letter B, and the twelfth and thirteenth are numbers from 01 to 99.

Companies forming a VAT group have the ending B02.

Dutch VAT declarations

Each of the companies registered with the Dutch tax authorities as a non-resident VAT taxpayer is obligated to report taxable transactions through periodic submissions, called declarations.

The standard is a quarterly settlement period. The requirement to submit monthly declarations applies to companies that have to pay more than 15 thousand euros in VAT per quarter. Additionally, monthly declarations may be required if a company frequently delays VAT payments. Enterprises that are tax residents and are also obligated to pay an amount less than 1883 euros annually, with intra-Community supplies and acquisitions totaling less than 10 thousand euros, are required to submit annual declarations.

What Dutch VAT is deductible?

Companies can offset VAT from sales or declared VAT in the Dutch VAT return with the corresponding charged or input VAT.

There are certain exceptions, including:

• selected employee benefits (use of sports and recreational facilities, accommodation, personal transport, meals),
• catering services.

Dutch VAT penalties

In the case of incorrect VAT declarations or late submission of Dutch VAT returns, foreign companies may be subject to penalties of up to €4,920. Interest is calculated on the outstanding VAT. The rate is updated by the Tax Department twice a year and is currently set at 4% annually.

There is no statute of limitations for Dutch VAT; however, the recovery of VAT by the Dutch tax authorities is limited to a period of five years from the time when the company was first obligated to pay VAT.

How are Dutch VAT credits recovered?

If there is an excess of input VAT over output VAT, then a Dutch VAT credit arises. In theory, this is repayable to the registered VAT company. The excess of input VAT can be reclaimed when submitting the VAT return. Claims should be filed within 5 years from the relevant VAT period.

VAT rates in the Netherlands

RATE	TYPE	TYPE OF GOODS OR SERVICES
21%	standard	all other goods and services not covered by the reduced VAT rate,
9%	reduced	foods (excluding food intended for consumption by animals), some non-alcoholic beverages, water supply articles, certain pharmaceutical products, some medical devices for persons with disabilities, domestic passenger transport (excluding air travel), intra-Community and international passenger transportation by road, rail, and inland waterway, books (including e-books), newspapers and magazines, entry to cultural events and amusement parks, writers and composers, some repairs and maintenance of private residential buildings, some cleaning services in private households, accommodation in hotels, restaurants (excluding alcoholic beverages), takeaway food, bars, cafes, and nightclubs, entry to sports events, use of sports facilities, minor bicycle repairs, footwear and leather goods, clothing and home textiles, hairdressing, cut flowers and decorative plants (some exceptions), and food production, some works of art, collectibles, and antiques,
0%	zero	taxation of gold coins, intra-Community and international passenger transportation by air and sea.

Estonian VAT rates are similar. Learn more about VAT in Estonia.

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