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Everything you need to know when doing business in the Netherlands
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An overview of Dutch VAT rates.
All the essentials you need to know.
If your company is doing business in or from the Netherlands, it will have to deal with Dutch taxes. One of the most relevant taxes for international businesses operating in or from the Netherlands is the Dutch Value Added Tax (VAT). In this article, we provide you with the essentials on Dutch VAT rates. Want to know more about Crowe Peak’s services in respect of VAT advice and VAT returns? Click here or contact us.
Value Added Tax (VAT)
VAT (Dutch: btw or omzetbelasting) is a tax that entrepreneurs have to add to their sale price on goods and services. It is calculated as a percentage of the sale price, similar to Goods and Services Tax (GST) levied in countries such as Canada, Australia and the United States. VAT is levied throughout the European Union (EU), but the EU Member States, such as the Netherlands, can determine some specifics such as the VAT rates that apply in their jurisdiction.
VAT Rates
In the Netherlands, the VAT rate that should be applied on the sale price depends on the type of product or service sold or the business in which the selling party operates. In principle, there are two VAT rates in the Netherlands:
- 21%, the “standard rate”; and
- 9%, the “reduced rate”.
Additionally, companies providing goods or services from the Netherlands to other countries often have to apply a 0% rate. Below we provide you with a general overview of the (use of the) different VAT rates in the Netherlands.
21% rate
The 21% rate is the standard VAT rate for goods and services. When the 9% or 0% rate does not apply, the goods and services automatically fall under the 21% rate.
9% rate
The reduced rate of 9% applies only to certain goods and services. These are goods and services of which the Dutch government deems it appropriate to reduce the tax burden for consumers. Below is a list of commonly traded goods and services that fall under the 9% rate.
| Goods | Services | |
| Foodstuffs | Reparation of bicycles, shoes and clothes | Short-stay rental (hotel, pension, holiday homes) |
| Water supplies | Hairdressing | Restaurant and catering services |
| Agricultural goods | Provision of access to sports, spas and saunas | Writers and composers |
| Medicines and aids | Provision of access to camping | Home renovation |
| Art, collectibles and antiques | Passenger transport | Performing artists |
| Books (including e-books) and periodicals | Cultural and recreative events (zoo, circus, museum, cinema) | Producing or yielding live stuffs (plants, animals) |
In some cases, services related to these types of business activities may also apply the reduced rate.
0% rate
The 0% rate exists mainly to facilitate international trade. Most importantly, this involves:
- Intra-Community supplies. When selling goods to an entrepreneur in another EU member state, the seller uses the 0% rate while the purchaser declares VAT in the country where the goods arrive (reverse charge mechanism).
- Exports to non-EU countries. On exports to countries outside the EU, the 0% rate applies. This also applies to most services related to exports (and imports).
Below is a list of goods and services on which the 0% rate can be applied.
| Goods | Services |
| Export to EU (intra-Community supply) and non-EU countries | Services related to import and export of goods outside the EU |
| Goods delivered to a bonded warehouse | International passenger transport |
| Imported goods that are sold again before having been cleared by Customs Authority | Workings on goods that will be exported afterwards (altering, processing, repairing) |
| The supply and provisioning of ships and airplanes | Services of agents and intermediaries |
| Fishery | |
| Excise goods |
VAT Exemption
Some sectors and business activities have a VAT exemption (for example financial services, healthcare and education). Exempted from VAT is not the same as applying the 0% rate. Most importantly, for activities with a VAT exempted, there is no right to deduct input tax. It is therefore incorrect to put the 0% rate on invoices in such cases. Rather, a reference should be made that a VAT exemption applies.
Combination of different rates
Businesses might sell items or solutions that are actually comprised of multiple goods and/or services on which different rates apply. For example, many items in the supermarket are comprised of foodstuffs (on which the reduced rate applies), but also of a casing (on which the general rate applies), such as a jar of honey.
In such a case, there are two possibilities with regard to the VAT rate(s) that should be applied. When one of the goods and/or services can be seen as the main supply, the combination of goods and/or services will be seen as one single good or services for VAT. Consequently, the VAT rate of the main supply applies to the whole supply (this is the case with food items in the supermarket, which are sold in their totality against the reduced rate). If no main supply can be identified, however, all goods and services should be treated separately on the invoice with their respective VAT rates.
Need help?
If you have questions regarding the correct application of (Dutch) VAT rate on your company’s invoices, please feel free to contact our VAT experts.
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