Netherlands VAT

Most of the time entrepreneurs file the Netherlands VAT tax return on quarterly basis. However, in case of high turnover it can be changed to monthly or from a cash flow perspective. On the other hand if the turnover is very low, on request the Netherlands VAT tax return can be changed to annually.

The first Netherlands VAT return must always be filed on paper. You can only reclaim paid VAT on goods or services which have been charged to you when it will be used for your activities as an entrepreneur. After the first VAT return, the Dutch tax authorities will send automatically a VAT-assessment with the amount which has been declared by you. Make sure the Netherlands VAT returns are filed on time. Otherwise, penalties will be issued. Also, when you have to pay VAT, pay it on time. The Dutch tax authorities will issue penalties very quick.

Please see here for an example of a Dutch VAT tax return.

At the moment Netherlands VAT rate is 21% (standard rate) or a reduced rate of 6% and 0% (for supply in the EU intra-Community supplies and export). For e-commerce special rules apply.

If clients are invoiced, certain invoice requirements must be met. The invoice must contain the date of issue, invoice number, full name and address of you and the client, description of the provided goods/service, Netherlands VAT rate, the amount, chamber of commerce number. In EU situations the EU-VAT number of you and the client abroad must be stated on it.

If you have a permanent establishment in the Netherlands, then the same regulations apply to you as to domestic entrepreneurs. As a result, you need to prepare and file periodically (monthly, quarterly or yearly) a Dutch VAT tax return. If you are not supplying goods and carrying out services as a foreign entrepreneur, but you have incurred costs, then you can apply for a refund of the VAT charged.

A permanent establishment is a place of business in the Netherlands with sufficient facilities for running an independent enterprise. The permanent establishment is part of the enterprise that you have established in a foreign country. The establishment is used for supplying goods and/or services to third parties. A shop or other fixed retail outlet, a workshop or a production plant with an adjoining office are all examples of permanent establishments. A store, a warehouse or an office that is used only for certain support or secondary activities (such as performing research, advertising or distributing information) is not regarded as a permanent establishment.

If a foreign company is not established or registered for VAT in the Netherlands special rules apply.