Guide to VAT in the Netherlands: Key information for e-commerce sellers
VAT, known in the Netherlands as BTW, is a fundamental component of the Dutch tax system. Introduced in 1969, the initial rate was set at 12%. Currently, the standard VAT rate is 21%, with reduced rates of 9% and 0%. The Dutch e-commerce market is one of the most significant in Europe, requiring sellers to pay close attention to tax issues. This article outlines the key aspects of VAT in the Netherlands, including rates, the registration process, and reporting obligations.
VAT rates in the Netherlands
Standard VAT rate – 21%
The standard VAT rate in the Netherlands is 21%, applied to most goods and services not covered by reduced rates or exemptions.
Reduced VAT rate – 9%
The reduced VAT rate of 9% applies to specific products and services:
- Food and non-alcoholic beverages
- Catering and restaurant services (excluding alcohol)
- Agricultural products
- Pharmaceuticals, medical devices, and therapeutic products
- Works of art and collectibles
- Newspapers, books, textbooks, audiobooks, and e-books
Zero VAT rate – 0%
The zero VAT rate is applicable to certain transport services and the activities of composers and writers. This rate is crucial for companies providing international transport services and for the creative sector.
VAT registration in the Netherlands: When is it required?
Mandatory registration
Foreign companies must register for VAT in the Netherlands under two main circumstances:
- Storage of goods: If a company stores goods in the Netherlands, it must register for VAT. This applies whether using their own warehouse or third-party fulfillment services.
- Sales exceeding €10,000: Companies must account for VAT in the Netherlands if their total sales to EU countries exceed €10,000. This can be done through the local tax office or by using the VAT OSS procedure.
VAT registration is carried out at the Dutch tax office, and the VAT number (BTW number) consists of 12 characters: the first 9 are digits, followed by the letter “B,” and ending with two digits.
VAT registration in the Netherlands: Step by step
Required documents
The following documents are needed for VAT registration in the Netherlands:
- Bank statement of the company account for the last three months
- Document confirming VAT registration in another EU country
- Extract from the Chamber of Commerce (KRS) or the Central Registration and Information on Economic Activity (CEIDG)
- Company’s articles of association
- Identity document
- Signed registration form for the Netherlands
Proper submission of documents should result in obtaining a VAT number within a few weeks.
VAT return deadlines
Monthly, quarterly, and annual returns
VAT returns in the Netherlands are typically filed quarterly. In some cases, monthly returns are required, often as a penalty for late tax payments.
Quarterly returns must be submitted by the last working day of the second month following the end of the quarter, e.g., the return for the first quarter must be submitted by the end of May.
Annual returns are possible if the VAT amount payable does not exceed €1,883, intra-community acquisitions and supplies do not exceed €10,000, and the entrepreneur has not requested a VAT deferral.
Penalties for non-compliance and delays
Financial penalties
Non-compliance with tax obligations in the Netherlands can result in financial penalties. Providing false information or delays can result in a fine of up to €4,920 and interest charges of 4% per year. Failing to register for VAT despite engaging in taxable activities can incur a penalty of up to €5,514. However, penalties can be avoided by registering with a retrospective date.
Reverse charge mechanism in the Netherlands
The reverse charge mechanism in the Netherlands simplifies VAT accounting and helps prevent tax fraud. It involves shifting the VAT accounting responsibility from the supplier to the customer in specific cases:
- The customer is a business based in the Netherlands or has a permanent establishment there.
- The customer is a legal entity (e.g., a corporation) based in the Netherlands.
In these cases, VAT should not be included on the invoice. Instead, the invoice should state “VAT reverse-charged” and indicate the rate as n/a.
VAT refunds in the Netherlands
Refund procedure
VAT refunds are possible if the expenses are directly related to business activities. Mixed expenses (business and private) can only be deducted if the private use does not exceed €227 per year. Refund decisions are usually made within 4 months after the application is submitted.
Intrastat NL
From January 2023, there are no longer any Intrastat thresholds in the Netherlands. The obligation to submit Intrastat declarations is determined by the Central Bureau of Statistics, which monitors intra-community transaction amounts based on Dutch taxpayers’ VAT returns. This change does not affect the existing Intrastat obligations, meaning VAT taxpayers still need to take active steps to comply with these requirements.
Summary
The Dutch VAT system requires e-commerce sellers to have a precise understanding of regulations and deadlines. Registration, regular return submissions, and timely payments are crucial to avoid financial penalties. Knowing the VAT rates for different products and services allows for accurate calculations and better business planning.
The Dutch e-commerce market, being one of the largest in Europe, offers tremendous opportunities but also demands careful attention to tax matters. Utilizing the services of specialists can significantly simplify the process of VAT accounting, increasing trust among business partners and enhancing the company’s prestige in the Dutch market: Contact us – amavat®.
Iga Turniak
