If you set up a business in The Netherlands, it’s important to consider the VAT (Value Added Tax) requirements and to understand how VAT works in The Netherlands.
Companies conducting business with or from the Netherlands are, in most cases, liable for Dutch VAT. When a company is liable for Dutch VAT it will have to obtain a VAT number (please see our article on how to obtain a Duch VAT number). Once your company has obtained a VAT number or started its business in The Netherlands, it should consider the following VAT requirements::
- Issuing invoice complying with Dutch law
- Keeping a proper account and records. These must be kept available for at least seven years;
- Issuing and processing credit notes and other corrections when applicable;
- Applying the correct VAT rates;
- Filing VAT returns
- Filing ICP returns, covering your intra-EU-community transactions;
VAT tariffs in the Netherlands
In the Netherlands there are 3 VAT rates applicable:
- 0% rate
- 9% rate
- 21% rate
The 0 per cent rate is applicable to entrepreneurs conducting business from the Netherlands to foreign countries. For example:
- The supply of goods from the Netherlands to another EU country;
- Services provided within the Netherlands, for example, services related to cross-border transactions;
- International transport of passengers.
Please note that when the 0% rate is applicable, you can still deduct VAT. When a company is VAT exempt it cannot deduct VAT.
As of the first of January 2019, the low rate of 6% is increased to 9%. The 9% rate is applicable to basic necessities of life, such as:
- agricultural products and services
When the 0% or 9% rate is not applicable, then you must charge the standard VAT rate of 21%.