It’s very important to discuss with a Dutch accountant on the exact accounting requirements that you need to consider. One of the first questions we often receive from our customers is how VAT registration works in the Netherlands, or even how to file the first VAT Return.
A very important milestone for most new Dutch companies is to obtain a Dutch VAT number and file their first VAT return. A VAT registration number application procedure is based on the European VAT directive.
In this directive, it is stated that countries have to issue a VAT registration number to companies performing taxable activities in that country. In the Netherlands, there is no specific formal procedure for VAT registrations, so the general rules for governmental bodies apply.
As with any other request to the tax authorities, they are obliged to decide within six weeks.
Our tax consultants in The Netherlands can inform you how to register for VAT, and how to operate your company while your VAT registration is still pending.
Once you receive your Dutch VAT number, we will inform you of the Dutch invoice format requirements, and how you should deal with European and international buyers and suppliers (Related Guide: VAT On Electronic Services Within The EU). In relation to that, it is also worth noting that there are ways to avoid paying VAT on imports in the Netherlands.
How to deal with VAT in the Netherlands
If you start a company in The Netherlands, you need to consider the requirement to apply for a VAT number, and in some cases, charge VAT on your sales invoices.
The application of a VAT number would also allow you to reclaim the VAT that you have paid on the purchases. A Dutch VAT number for your company will also enable you to trade within the European market, without charging VAT on sales to corporate buyers.
But not all companies that are incorporated in the Netherlands are required to apply for a VAT number. In case your Dutch business does not expect any local presence or operations in the first years of business, the VAT liabilities could be postponed.
In this VAT guide, Bolder Group Associates provide an overview of the basic VAT requirements, as well as detailed descriptions of how to apply for a VAT number in the Netherlands.
In case you are not certain if you are eligible (or even legally required!) or obtain a VAT number in The Netherlands, our company officers will provide you with free advice. Contact our team for more information.
- No (local) bank account is required to apply for a VAT number
- Any company in the world can apply for a Dutch VAT number
- There are different application procedures for companies without physical presence (corporate residence) in the Netherlands
- It’s important to confirm your VAT liabilities in case of ‘ABC’ transactions in which your EU supplier delivers goods directly to your EU buyer (B2B)
- The definitions ‘sales tax’ and ‘VAT’ are often used interchangeably, but they mean the same thing.
- Important! Entrepreneurs and self-employed persons who are in trouble due to the corona crisis can ask the Tax and Customs Administration to postpone payment. (In normal circumstances, the VAT is paid to the Tax Administration within one month after the quarter has ended0
What is VAT?
VAT, also known as sales tax, is an abbreviation for Value Added Tax. This means that it is a tax that is levied on the value that an entrepreneur adds to a product or service. In other words: the difference between his purchase price plus expenses and the selling price.
Unless they are exempt from this, every entrepreneur must charge this VAT on their sales, or their turnover, and pay it to the tax authorities. On the other hand, the entrepreneur may deduct the VAT that they paid as input tax.
This is done in every link of the production chain, from manufacturer to wholesaler to store. Ultimately, it is the consumer who has to pay the entire VAT amount.
And with that, we have arrived at what the VAT really is: a consumption tax.
You use your VAT ID for all contacts with customers and suppliers, such as on your invoices and website. In short, on all your expressions to the outside.
The VAT ID looks like this:
- the country code NL
- 9 (random) numbers (typically this is the RSIN number, mentioned on your Dutch company’s Chamber of Commerce extract)
- the letter “B”
- a check digit of 2 digits
Example VAT identification number: NL 00088887B01.
When and how to apply for a VAT number in The Netherlands?
The first step is to check if your Dutch business is liable for VAT, and should apply for a VAT number.
Most of our clients, do not immediately create a local presence in the Netherlands, although they prefer to apply for a Dutch VAT number, in order to perform activities in Europe. For most of these cases, we assist in the so-called ‘non-resident’ VAT number.
Once you have confirmed that the non-resident VAT number in the Netherlands will suit your needs, we can start with the application. If your company is creating a physical presence in the Netherlands, right from the start, we can inform the Tax & Customs Administration of this and request for the activation of the resident VAT number. This can also be arranged at any time in the future.
In a standard situation, in which a Dutch company is incorporated by a Dutch national, a new starting company will receive the VAT number about a week after registering with the Chamber of Commerce. He does not have to go to the Tax Authorities for this or file a separate application form.
For non-Dutch entrepreneurs or directors, there can be extra requirements, even if the company is managed by EU nationals.
The non-resident application is the fastest procedure as it requires much less investigation by the Tax & Customs Administration. A typical VAT number application is processed within 2-3 weeks. Sometimes even faster.
Here you find an example of the non-resident VAT number application form:
Bolder Launch will assist you to complete the form, send it to the Tax & Customs Administration and make sure you receive the VAT number quickly as possible.
When the form is filled out, it has to be sent to:
6401 DJ HEERLEN
How to use your VAT number
If your Dutch business is liable for VAT, it’s important to consider the following requirements:
- Issuing invoice complying with Dutch law
- Keeping a proper account and records. These must be kept available for at least 7 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;
As mentioned above, you must state your VAT ID on your invoices. The date you put on your invoice determines the declaration date. So do you send an invoice on September 15? Then you must include the VAT on this invoice in your 3rd quarter VAT return. Even if you have not received the payment for this invoice in the 3rd quarter.
Do you sell via the Internet or do you offer your services there? Please clearly state your VAT ID number on your website.
You need a sales tax/VAT number to file a VAT return.
Most entrepreneurs file a digital VAT return every quarter. Do you have to pay more than 15,000 euros per quarter in VAT? Then you have to file a VAT return every month.
The VAT return must be made within 1 month after your tax return period. The first quarter ends March 31. This means that you have one month for your declaration. Your declaration must therefore be arranged on 30 April.
VAT exemption/threshold (KOR)
Do you use the small business scheme (KOR)? Then you do not have to file a VAT return. But you can therefore not reclaim VAT.
Claiming refund of VAT
When an entrepreneur purchases goods for the company in The Netherlands, VAT is levied over these purchases. This VAT usually can be deducted. For foreign companies there are two types of situations when they want to claim a refund of VAT:
- The company is established in an EU country;
- The company is established in a non-EU country.
In both scenarios, VAT can be claimed.
Start your VAT Administration
Once your Dutch VAT number is activated, which you can check here, you are required to keep your VAT administration in good order. There are several ways to do this. Depending on the size of your (Dutch) company, and the volume of transactions, it can be considered to use an accounting tool or to keep a simple overview in Excel.
Bolder Group Associates can provide full accounting services in the Netherlands or it can simply assist your company to submit its VAT returns.
In many cases, a newly registered company in The Netherlands will have to file its first VAT return after the end of the quarter (based on the calendar year). This means your company has only been active for a short period of that quarter, and the first VAT return must be filed via a hardcopy return. After that, the company will have to report full quarters, and it can file these VAT returns via an online portal.
In case VAT is charged by your Dutch company, you must pay the VAT at the end of that VAT period. Even if your client has not paid yet. At the same time, you can reclaim any VAT which is charged to your Dutch company, even if you didn’t pay the invoice yet, at the end of the VAT period.
Reclaim paid VAT on unpaid invoices
If you have delivered a product or service, you send an invoice. Unfortunately, it is possible that a customer does not pay the invoice or only partially. While you have already stated the VAT as received VAT with your quarterly declaration. You can reclaim this irrecoverable VAT if the customer has still not paid at the latest one year after the expiry of the payment deadline. Have you not set a payment term? Then the statutory payment term of 30 days after receipt of the invoice applies.
If you have submitted your first VAT return, and you are expecting a reclaim, there might be a delay in the payment by the Tax & Customs Authorities.
Within eight weeks after they have received your VAT return, you should receive the money. However, in the case of newly incorporated Dutch entities, which are managed by non-residents, and active in International Business, the Tax Department could send a letter with additional questions (creating an extra delay). In general, payments are done within 2-3 weeks after the VAT return is submitted.
Accounting Software & Reports
We also have experience with apps that will allow you to easily scan and forward all your invoices for us to process in the accounting tool. In case you already have an overseas accounting team or finance manager, you can choose to keep the administration overseas and provide us with the accounting reports on a regular basis, so we can file Dutch tax returns and prepare the Financial Statements based on the Dutch accounting standards.
We can offer a personalised online dashboard, showing a real-time overview of your turnover, expenses, profits, employee information and much more.