In many parts of the world, including in the European Union (EU), value-added tax (VAT) is charged on most transactions. VAT is a consumption tax that’s charged each time value is added during the life cycle of a product. This means tax could be charged multiple times, from the initial production of a product until its final sale, when the consumer pays the full, non-reimbursable, amount.
Because the Netherlands is a member of the EU, much of the country’s tax framework is determined by EU regulations. However, EU member countries do have some leeway in establishing tax rates and certain rules that apply to companies doing business within their borders.
This guide explains the VAT rules for companies that sell goods or services to customers located in the Netherlands, including products and services that are subject to tax, as well as the rules for when tax returns must be filed.
How VAT works in the Netherlands
Both resident and non-resident businesses that engage in taxable activities in the Netherlands must register for Dutch VAT (called Belasting op de Toegevoegde Waarde in Dutch). There is no VAT registration threshold for domestic taxable supplies, and businesses must register as soon as they begin making taxable transactions.
For cross-border B2C distance sales within the EU, where the seller is established in a single EU Member State, a €10,000 EU-wide threshold applies. Once this threshold is exceeded, sellers must either register for VAT in each destination country or report VAT through the One-Stop Shop scheme.
In addition, businesses that store goods in the Netherlands, including those selling through Fulfilled by Amazon (FBA), are required to register for Dutch VAT, regardless of sales volume.
Dutch VAT rates
Different VAT rates apply to different products in the Netherlands:
The standard VAT rate of 21% applies to all goods and services that are not subject to the reduced rate or the 0% rate and that are not exempt.
The reduced VAT rate of 9% applies to products including:
- Some food items.
- Water supplies.
- Certain soft drinks.
- Some pharmaceutical products.
- Medical equipment used by people who are disabled.
- Domestic passenger transport, not including air travel.
- Media, including books, electronic books, periodicals, and newspapers.
- Admission to cultural events.
- Admission to sporting events.
- The use of sports facilities.
- Services provided by writers and composers.
- Hotel accommodations.
- Hairdressing.
- Some types of artwork.
- Cleaning services in private homes.
A VAT rate of 0% applies to a limited range of supplies, such as certain qualifying gold transactions and specific international transport services (under specific conditions).
Items that are considered zero-rated must be reported on VAT returns but are taxed at a rate of 0%.
VAT-exempt supplies are not subject to VAT on the sale, and businesses making exempt supplies are generally not entitled to recover input VATsystem. Exempt items include insurance and financial services, charitable fundraising events, social services, and elder care.
Registering for VAT
It is critical that you register when required in order to avoid serious penalties. If you fail to fulfill your obligations, you could face fines and interest payments.
Resident vs. nonresident businesses
Resident businesses are those with a physical presence within the Netherlands. They do not have a threshold for when they must register. If a company carries out any taxable business in the Netherlands, it is required to be registered with the Dutch tax authority, the Belastingdienst.
However, there is a small-business scheme that very small resident businesses can opt into to avoid having to charge VAT and file regularly, if their annual turnover is below €20,000. (Participation in the scheme disqualifies the business from reclaiming input VAT.)
Non-resident businesses must register for Dutch VAT before carrying out taxable activities that give rise to Dutch VAT liability. Typically, there is no minimum turnover threshold for this; even a single taxable transaction that creates a Dutch VAT liability can trigger a registration obligation.
How to register
You will need to register with the Belastingdienst. There is an online form you can complete in order to register. You can complete the form, print it, sign it, and mail it to the address listed on the form.
Within two weeks after you submit your form, you should receive your Dutch VAT number.
Working with a tax representative in EU countries
Many EU countries require you to appoint a fiscal representative. This is a person within the country who agrees to share responsibility for your VAT obligations. In the countries that require this, you must provide details about your fiscal representative when you register to collect VAT.
The Netherlands does not require this. This can simplify the process and lower the costs and complexity of complying with the country’s VAT obligations.
When to charge tax
Individual countries set their own rules for which items are taxable, as well as for what rates apply. The Netherlands’ list of taxable, exempt, and zero-rated items may differ from that of other countries within the European Union.
Reverse charges
In EU countries, the reverse charge mechanism is used to simplify cross-border transactions. It shifts the responsibility from reporting VAT from the seller of goods to the buyer of goods.
When the reverse charge mechanism applies, sellers or suppliers issue an invoice that does not charge VAT and includes a statement indicating that the reverse charge applies. The buyer declares the VAT as output tax on their return, and if they have the right to deduct input tax, they can reclaim the amount on the same return to make the transaction VAT neutral.
In the Netherlands, the reverse charge mechanism may apply to certain supplies made by a non-established supplier to a VAT-registered customer in the Netherlands, depending on the nature of the goods or services.
B2B vs. B2C
When selling to customers, businesses are expected to charge VAT at the applicable rate. Final consumers who pay the VAT are not typically able to reclaim it, and the general rule is that the VAT amount due is determined based on the location of consumption or the place where the customer is located.
For B2B transactions, the reverse charge mechanism often applies to shift the responsibility for VAT accounting from the seller to the buyer.
Marketplace facilitators
Many companies sell goods and services through marketplaces, platforms, or electronic interfaces or portals. Sometimes, these marketplaces are required by EU law to assume responsibility for collecting VAT.
Marketplaces must collect VAT if they are considered “deemed sellers,” because they play an instrumental role in selling the goods and services. They don’t just act as a pass-through for the sale to take place — they actually help to arrange and facilitate it.
Examples of behaviors that could make a third-party platform a deemed seller include:
- Assuming responsibility for the delivery of goods or services
- Taking responsibility for collecting payment
- Exercising influence over pricing
- Offering support services to customers
- Displaying the marketplace’s brand more prominently than the seller’s brand
Companies like Amazon may be treated as deemed sellers for certain transactions, while services like Stripe that simply help facilitate transactions are not. Companies that provide these types of services without playing a key role in the transaction are considered intermediaries and are not required to collect VAT.
Any business selling to Dutch customers on a third-party platform needs to determine whether marketplace facilitator rules apply and whether the platform is acting as a deemed seller, in which case, the company will not be responsible for VAT collection.
VAT deductions
Registered businesses in the Netherlands can deduct input VAT, or VAT paid on business expenses.
This can be deducted from the output VAT, or the VAT that they charge to customers. However, the deductions must be directly related to the taxable activities of the business, and the company must have a VAT-compliant invoice in order to claim a deduction.
Companies making deductions will submit them on their VAT return.
Statute of limitations
The general statute of limitations for Dutch VAT is five years, with the clock beginning to run at the end of the tax year in which the VAT obligation was incurred
Staying compliant
Companies are expected to comply with VAT regulations, and invoice requirements are one way to ensure that they are doing that.
Invoices must include:
- Supplier and customer details.
- The company’s VAT number.
- A description of the goods or services sold.
- The VAT rate.
- The amount of VAT charged.
The Netherlands requires companies to submit EC Sales Lists (Opgaaf ICP), typically on a quarterly basis, though monthly reporting may apply in certain cases.
These lists must include the VAT identification number for the customer, the type of transaction, and the total value of the supplied goods or services. Lists must be submitted electronically using the Belastingdienst portal.
Filing VAT returns
VAT-registered businesses are required to file quarterly returns in most cases, although some companies with high turnover must file returns monthly. Returns need to include:
- Output VAT (VAT on sales).
- Input VAT (recoverable VAT on purchases).
Electronic submission via the Belastingdienst portal is required for all returns
Filing deadlines
You may need to submit VAT forms monthly, quarterly, or annually, depending on revenue.
- If you owe €15,000 or more in VAT each quarter, then you may be required to submit monthly.
- If you owe less than €1,883 annually, you can submit annually (if certain conditions are met).
- Most other businesses must submit quarterly.
There are strict filing deadlines for Dutch VAT returns. Returns must be filed:
- On the last day of the month after the reporting period for monthly and quarterly VAT.
- By March 31, 2025, of the following year for the annual return.
Payments are typically due on the same day that the VAT return must be submitted.
Recordkeeping requirements
You are required to keep your VAT records for a minimum of seven years.
Risks of noncompliance
Failure to comply with VAT rules can result in audits, penalties, fines, and reputational damage to your business.
Tips on staying compliant
The best way to stay compliant with Dutch VAT regulations is to make sure that you understand the rules and register when required.
You may be able to simplify the process by using the One-Stop Shop, which allows companies to pay VAT for all B2C sales within the EU through one common portal.
The OSS scheme has been in effect since July 2021 and allows you to charge customers their local VAT rate while you pay all taxes due through your domestic tax portal, which then distributes the appropriate tax to other EU countries.
You can also take advantage of the reverse charge mechanism for B2B sales to simplify business transactions.
Implementing software
Complying with VAT obligations in the Netherlands and other EU countries can be complicated, but understanding your obligations will help you avoid serious financial and operational issues.
Numeral can help. In fact, we offer tax support for sales in more than 70 countries. We’ll track when you need to register, take care of registration on your behalf, collect the required tax due, and even handle correspondence from taxing authorities.
Instead of managing sales tax rules for dozens of countries, you can focus on growing your global presence, while we take care of the technical tax details.
[blog-post-inline-cta]
Final thoughts
VAT rules in the Netherlands can be complicated, but the right tools can help. You’ll need to make sure you understand when you must register, know the local tax rates, and decide on the best way to fulfill your tax obligations.
Turn to Numeral today to let us take on these tasks so you can spend less than five minutes a month on sales tax while we make sure your Dutch tax obligations are fulfilled.
