Is your enterprise established outside the Netherlands? And do you do business in the Netherlands? Then you will be involved with the Dutch VAT regulations and you are probably looking for an expert that handles your VAT management.
In the Netherlands we also refer to VAT as turnover tax. Your tax liability depends on how you conduct your business and who your customers are and where they are located. VAT and import duties are in most cases 0%. Even though the VAT rate is often 0%, you may have to register your company at the Dutch Tax Administration. This is not always the case and if you have to register your company, this means that you do not have to establish a company in The Netherlands; you only have to register for VAT purposes.
We take care of your VAT management. We handle the registration and also the entire VAT administration for you. Nonetheless, it may be interesting to read some details about VAT in The Netherlands and Europe below.
VAT on import
VAT is involved when you send your products to our warehouse in The Netherlands. A distinction is made between an import from another EU country and a non-EU country.
Import from another EU country
This is called an intra-Community acquisition. You transport products from another EU country to the Netherlands whereby the supplier is an entrepreneur. The supply is taxed at 0% in the other EU country. The delivered goods are taxed in the Netherlands with Dutch VAT.
You are required to register yourself with the Dutch Tax Administration if you are not established in The Netherlands. We handle this process and we will request a Dutch VAT number for you. You must inform your supplier of this number to apply 0% VAT on the supply.
You make an intra-Community acquisition if you transfer goods to the Netherlands from your enterprise in another EU country. We call this the transfer of own goods. The same process applies for transferring your own goods.
Both imports – whether you transfer your own products or purchase them from your supplier – are taxed in The Netherlands. Depending on the product, this is 9% or 21%. We deduct this amount as input tax in the same VAT return, so you do not have to pay the VAT; not at the moment of import and not later on.
Import from a non-EU country
Products that are imported from outside the EU to the Netherlands must be declared to customs. You are then able to import the goods into the EU. You will be required to pay 9% or 21% VAT on the value of the shipment to customs. We will claim refund of this VAT as input tax on your VAT return later on. It may take a few months before you have your money back.
The Dutch Tax Administration is in general very quick to return the VAT; often within two months. Nonetheless, you still have to pre-finance the VAT. Therefore a clever facility has been adopted in article 23 of the Dutch VAT Act; the reverse-charge mechanism on import.
Reverse-charge mechanism on import: Article 23
This means that you are not required to pay the VAT on import to the Netherlands immediately. The VAT can then be paid when you file the VAT return at the end of the period. In order to do this, you will need an Article 23 permit. As foreign entrepreneur, you are not able to apply for an Article 23 permit yourself. However you can engage us as your tax representative for this purpose. We can apply for a permit for you. In some cases you have to register your company for VAT purposes first before you can apply for an Article 23 permit. This is not always necessary and in that case you can make use of our Article 23 permit that is already in place.
We will declare the VAT that you are required to pay on the VAT return for that period. We will deduct this VAT as input tax on the same VAT return so you do not have to pay the VAT at all. This save a lot of hassle, such as payments, refunds and filings. Most of all is saves a lot of time. Your shipment does not have to wait for the VAT payment before it will be released by customs. It helps to smooth out the import process and prevent delays.
Conclusion
If you import from another EU country, you do not have to pay VAT. If you import from a non-EU country, you have to pay 9% or 21% VAT on import unless you engage a tax representative. In some cases you do not have to register your company for VAT purposes if you engage a tax representative.
VAT in Europe
When you export products from the Netherlands to entrepreneurs in EU countries other than the Netherlands, we call this as an intra-Community supply. These supplies are taxed at 0% VAT.
To apply the 0% VAT rate on your export you have to meet two requirements:
- Your customer is an entrepreneur and has a VAT identification number in the country to which the goods are sent.
- You transport the products to another EU country.
If you sell your products to distributors in other EU countries, you most likely meet the two conditions. The advantage for your distributors is that they do not have to pre-finance any VAT when they purchase your products, that are send from our warehouse in The Netherlands. If you ship the products directly from outside the EU, they have to pay VAT on import.
Conclusion
Trade within the EU is taxed at 0% VAT. It saves your distributors from pre-financing VAT on import (in addition to saving transit time and costs).
VAT and export
Do you export your products from the Netherlands to non-EU countries? Such supplies are taxed at 0% VAT. The only requirement is that you must be able to show from your administration that the goods have actually left the EU. This is also something we take care of.
Not sure if your customer is located in a non-EU country? Check the next tab.
EU member states
The 28 EU countries are currently:
- Austria
- Belgium
- Bulgaria
- Croatia
- Cyprus
- Czech Republic
- Denmark
- Estonia
- Finland
- France
- Germany
- Greece
- Hungary
- Ireland
- Italy
- Latvia
- Lithuania
- Luxembourg
- Malta
- Netherlands
- Poland
- Portugal
- Romania
- Slovakia
- Slovenia
- Spain
- Sweden
- United Kingdom
Free movement of products between EU countries
You can trade your products within the EU without obstacles, such as import duties or other taxes. Hence, the 0% VAT rate is applicable. Some EU countries have areas, however, that do not participate in the free movement of goods and services. For VAT purposes, these areas are treated as non-EU countries. Examples are Aruba, Bermuda, Cayman Islands, Channel Islands and Greenland. Additional export documents may be requested for these areas.
Fiscal Representation
Tax representative
As foreign entrepreneur you can appoint us as your tax representative to handle your business with the Dutch Tax Administration. As your tax representative, we can take care of the following tasks for you:
- Filing the VAT return
- Filing the ICP declaration (for sales to other EU countries)
- Applying the reverse-charge mechanism on import
Authorised representative
If you do not need a tax representative, for example if you do not need to apply the reverse-charge mechanism on import, you can also appoint us as your authorised representative to handle your responsibilities regarding your Dutch VAT number. As your authorised representative, we can take care of the following tasks for you:
- Filing your VAT return
- Filing your ICP declaration (for sales to other EU countries)
We have in-house tax expertise that manages all your tax compliance requirements and acts as your contact for the Dutch Tax Administration. We also submit your Intrastat declarations if necessary.
The most important advantage from a tax perspective is that in many cases 0% VAT applies to your imports and your exports if you ship them from our warehouse in The Netherlands. It saves time, prevents delays and it avoids that your customers have to pre-finance VAT on their purchases.
