Key takeaways
- The Netherlands abides by the EU VAT Directive, with different rates of taxation depending on the goods or services being sold.
- Businesses must obtain a Dutch VAT number if they exceed certain thresholds or if they meet specific criteria, such as storing goods in the Netherlands.
- Anyone doing business in the Netherlands must also adhere to invoicing standards, filing frequencies and deadlines, as well as tax point rules.
In short: The Netherlands has a standard VAT rate of 21%, a reduced rate of 9% and a 0% rate. Businesses must register for a Dutch VAT number if they exceed the €10,000 EU distance selling threshold or store goods in the Netherlands. Dutch VAT returns are usually filed quarterly.
This guide covers all the main parts of Dutch VAT. You’ll learn the VAT rates, how to register for a VAT number and the other VAT compliance rules in the Netherlands. By the end, you’ll understand VAT in the Netherlands and be ready to handle your obligations with confidence. For a full country overview, see our Netherlands VAT manual.
How does the Dutch VAT system work?
The Dutch VAT system follows EU rules, with standard, reduced and zero rates for different goods and services. Value Added Tax in the Netherlands follows the European Union (EU) VAT Directive. You need a VAT tax number if your business exceeds certain thresholds or stores goods in the country.
But what exactly are these rates, and how do they fit within the EU VAT system?
What are the Dutch VAT rates?
The Netherlands VAT rates are as follows:
- Standard rate: 21%
- Reduced rate: 9% (applies to certain goods and services such as food, beverages, agricultural products and medications)
- 0% rate: applies to specific services, including cross-border transactions.
These rates follow the wider EU VAT Directive, which aims to bring VAT law into line across member states.
What does the European Union VAT Directive require?
The European Union VAT Directive says VAT rates must stay within a certain range to keep the EU VAT area consistent. Under the EU VAT Directive, the lowest standard VAT rate the Netherlands can set is 15%.
Within this range, each member state can set its own VAT rates while still following the wider EU framework.
Who must register for VAT in the Netherlands?
Businesses that exceed certain thresholds or store goods in the Netherlands must register for a Dutch VAT number. This includes foreign companies with a Dutch branch, which also need a VAT identification number.
So what does the registration process involve, and how can foreign entrepreneurs manage it?
When do foreign businesses need a Dutch VAT number?
Foreign businesses need a Dutch VAT number if they exceed the €10,000 EU-wide threshold or meet other criteria, such as storing goods in the Netherlands. On July 1, 2021, the EU replaced country-specific distance selling thresholds with this single threshold of €10,000 EUR for all EU Member States.
This means all businesses operating in the Netherlands, local or foreign, follow the country’s VAT rules and contribute to the Dutch tax system.
The registration process is simple and can be completed online. Businesses must provide their contact information.
How does online registration work?
To register for a Dutch VAT number, you complete an online form, print and sign it, and send it to the Dutch tax authorities. The Dutch VAT registration form is on their website. You can also find the address of the Dutch tax office there.
If your company is not based in any EU Member State, you will need to appoint a fiscal representative to act for your business in the Netherlands.
Give accurate information when you register. Errors can lead to penalties.
What does a Dutch VAT number look like?
A Dutch VAT number has the country code 'NL', nine digits, the letter B and two final digits. For example: NL000099898B57. The Dutch VAT Number is called the 'BTW-identificatienummer” or 'BTW-nummer' for short.
What are the Dutch VAT compliance requirements?
Dutch VAT compliance means following set rules for invoicing, filing frequency, deadlines and tax point rules. Most businesses file quarterly VAT returns, and you must pay VAT on time. Let’s look at each of these requirements.
What must a Dutch invoice include?
Invoices in the Netherlands must contain specific details, such as:
- Invoice number
- Date
- Supplier and customer information
- Vat identification number of supplier
- Description of goods or services provided
Both electronic and paper invoices are allowed. E-invoicing is required for business-to-government (B2G) transactions.
You must keep invoices for seven years, or ten years for invoices relating to immovable property.
How often must you file Dutch VAT returns?
Dutch VAT returns are usually filed every quarter. Monthly or yearly filing is possible on request or depending on the amount of VAT payable. Businesses not based in the Netherlands must file the VAT return within two months after the end of the period. For businesses based in the Netherlands, the deadline is one month.
By meeting these filing frequencies and deadlines, you can avoid penalties and stay compliant with Dutch VAT rules.
What are the Dutch tax point rules?
Tax point rules in the Netherlands decide when VAT becomes due to the tax authorities for a VAT reporting period (monthly or quarterly). For most goods, the tax point is the time of delivery or passing of title. For services, it is the completion of the service. We cover this in more detail in All You Need to Know About the P IVA Number Italy.
Understanding these rules helps you manage your VAT obligations well.
How do you verify and use Dutch VAT numbers?
You can verify a Dutch VAT number with the EU’s VIES tool and must show it on invoices and websites. Doing this keeps you compliant with Dutch VAT rules. It also builds trust with customers and suppliers.
So, how can businesses verify and use VAT numbers?
How do you verify a VAT number with VIES?
The VIES (VAT Information Exchange System) tool from the European Commission checks whether a Dutch VAT number is valid. Enter the VAT number into the VIES tool to confirm you are dealing with a real company. This helps you avoid errors and fraudulent transactions.
This check is also useful for private individuals in the Netherlands dealing with Dutch companies. Knowing the country code can make communication and transactions smoother.
Where must you display VAT numbers?
Invoices must show the business’s VAT identification number, and websites must show the VAT ID number too. EU businesses must include the VAT identification number of any Dutch clients on their invoices and summary statements. This is a legal requirement.
Showing VAT numbers clearly proves you follow Dutch VAT rules and builds trust with customers and suppliers.
How do you deregister a Dutch VAT number?
Businesses may need to deregister their VAT number when they stop trading or no longer meet the VAT registration threshold. In the Netherlands, this process involves:
- Dissolving the legal entity
- Reporting the dissolution to the Chamber of Commerce (KVK)
- Settling all debts and dividing the remaining assets
- Deregistering the legal entity at the KVK
Deregistering a VAT number in the Netherlands is fairly simple.
When does automatic deregistration happen?
Automatic deregistration happens when a company is removed from the Dutch Business Register, and the VAT number ends. The KVK tells the Dutch Tax and Customs Administration about the termination. You then receive a written confirmation.
After this, businesses that have stopped trading or no longer meet the registration rules no longer need to follow Dutch VAT regulations.
What VAT exemptions and special cases apply in the Netherlands?
The main special cases in Dutch VAT are the reverse charge mechanism and the IOSS (Import One-Stop Shop) scheme for low-value goods. Understanding these exemptions and special cases helps you manage your VAT obligations more efficiently.
What is the reverse charge mechanism?
The reverse charge mechanism moves the duty to pay VAT from the supplier to the customer. The customer accounts for the VAT on their own VAT return. The supplier does not charge the VAT on the invoice.
This system makes cross-border transactions simpler and reduces paperwork for businesses.
How does IOSS affect low-value goods?
The IOSS scheme began on July 1, 2021, and removed the VAT exemption on low-value goods up to €150 imported into the EU. Now all imported goods are taxed in the destination country. This creates a level playing field for EU businesses and makes VAT simpler for consumers buying from non-EU sellers.
The IOSS scheme is a major change in how VAT is collected on imported goods.
Conclusion
Dutch VAT can feel complex, but with the right resources and knowledge, you can manage your VAT obligations well. This guide has covered the Dutch VAT system, from registering for a VAT number and meeting compliance rules to exemptions and special cases. With this knowledge, you can handle your VAT duties with confidence and stay compliant with Dutch VAT rules.
Need help with your Dutch VAT compliance?
Researching Dutch VAT laws can help you better understand VAT compliance requirements, though the process can be complex and time-consuming. Taxually offers specialized tax software that takes care of the day-to-day VAT needs of your business, so you can get on with more important things.
Book a free call with one of our VAT experts to find bespoke solutions for your business, optimize your VAT costs, and reach millions of new potential customers.
How Taxually handles this
Taxually’s CrossTax handles VAT registration, VAT, OSS and IOSS returns and fiscal representation in the countries you sell into, and checks your sales data against 250+ validation rules before each filing. OneTax then pays every tax authority with one bulk payment in your chosen currency.
Related guides
Frequently asked questions
What is the VAT rate in the Netherlands?
Currently, the standard VAT rate in the Netherlands is 21%. Additionally, there are two special rates: a zero rate and a reduced rate of 9%.
Do you charge VAT from the UK to the Netherlands?
When purchasing items online from the UK, you must always pay VAT. If you’re in the UK and the place of supply of your service is in an EU country, you do not pay UK VAT.
When importing products from the UK to the Netherlands, VAT is charged over the value of the products, including any import duties.
What is the 9 VAT rate in the Netherlands?
The 9% VAT rate in the Netherlands is known as the low tariff and applies to food and drink, medicines, newspapers, magazines, and other similar products and services.
How does VAT tax work in the Netherlands?
In the Netherlands, VAT is payable on the supply of goods and services, as well as the importation of goods. The standard rate is 21%, with a reduced rate of 9% for some goods and services.
Consumers pay this tax to the trader, who then remits it to the Tax and Customs Administration.
How can I register for a Dutch VAT number?
To register for a Dutch VAT number, you must complete an online form, print it, sign it, and submit it to the Dutch tax office. The form can be found on the Dutch tax office website.
How long before I receive my Dutch VAT ID number?
For a Dutch resident company, it normally takes no longer than two weeks to receive your VAT number. if your business is not-Netherlands based, it can take up to eight weeks.
