VAT REGISTRATION IN THE NETHERLANDS
When do you have to register for VAT?
It is mandatory for your company to apply for VAT registration with the Dutch tax authorities before starting your activities. Financial penalties may apply if the application for registration is submitted late.
What documents do I need to provide when I register?
If your company wishes to register for VAT in the Netherlands, it is essential to contact the Dutch tax authorities. There is no need to contact the tax authorities in your country of establishment.
In particular, your company will need to submit the following documents:
- The VAT registration form(s) completed in the language of the country
- A copy of the articles of association
- An extract from the trade register
- A certificate of VAT liability
- Power of attorney (if using a fiscal agent)
- Proof of activity on the territory of the country concerned: a contract, an order form, etc.
The Dutch tax authorities may require some of these documents to be translated into Dutch.
How long does it take to get a VAT number?
If your file is complete, it generally takes one month to obtain the VAT number.
Is a fiscal representative necessary?
Non-European companies can register for VAT themselves in the Netherlands. However, in order to apply the reverse-charge mechanism on import, they still have to go through a VAT representative. This is a local company that will represent you to the local VAT authorities. He is responsible for the respect of all your VAT obligations, including those of which he was not aware. For this reason, he may require a deposit (e.g. a bank guarantee) from you before accepting the representation assignment.
European companies are not obliged to appoint a tax representative. However, to facilitate their relations with the local tax authorities, they may appoint a proxyholder (agent) to carry out the tax formalities on their behalf. In this case, it is not necessary to issue a bank guarantee. The company remains solely responsible for paying its VAT debts.
VAT OBLIGATIONS IN THE NETHERLANDS
Is it necessary to keep VAT accounting ledgers?
Your company must keep ledgers sufficiently detailed to enable the application of VAT and its control by the Dutch tax authorities.
When do you have to file a VAT return?
The company is required to file a VAT return on a quarterly basis. However, it can opt (or imposed by the tax authorities) for a monthly filing provided that the VAT payable per quarter exceeds € 15.000.
Yearly reporting period can also be opted for if payable VAT balance does not exceed € 1.883 a year.
The VAT return must be filed electronically authorities before the end of the month following the end of the taxable period (last day of N+1).
However, for foreign taxpayers not established in the Netherlands but registered for VAT purposes in this country, a two-month period applies (last day of N+2).
The VAT expert's eye
Member States set the duration of the taxable period at one, two or three months. However, they may set different periods provided they do not exceed one year. The VAT return must be submitted within a period to be determined by the Member States. This deadline may not be more than two months after the end of each taxable period (Art. 250 of the VAT Directive).
Do I have to submit an annual return?
Your company is not required to file an annual recapitulative VAT return.
The VAT expert's eye
Member States may require the taxable person to file a return containing all the data referred to in Articles 250 and 251 and concerning all transactions carried out during the previous year. This return shall include all the information necessary for any adjustments. They authorize, and may require, the return to be made by electronic means under conditions which they determine (Art. 261 of the VAT Directive).
What is the deadline for paying Dutch VAT?
The company must pay the VAT due at the latest on the last day of the month following the end of the taxable period [month/quarter] to which it relates.
The VAT expert's eye
You do not pay the VAT due on the return or you do not pay it on time? Then this is considered a failure to pay. You may then receive a default penalty. The amount of the penalty for non-payment (on time) of the amount due on the VAT return is 3% of the unpaid, partially unpaid or not paid on time tax, with a maximum of € 5,514. The fine for non-payment is at least 50 €.
When should the intra-EU statement be filed?
The company is obliged to file an electronic intra-Community listing before the last day of the month following the reporting period [month/quarter] to which it relates.
The eye of the VAT expert
A recapitulative statement is drawn up for each calendar quarter within a period and according to procedures to be determined by the Member States. However, Member States may provide for recapitulative statements to be submitted on a monthly basis. Member States may allow, and may require, recapitulative statements to be submitted electronically under the conditions they determine (Art. 263 of the VAT Directive).
When should the Intrastat declaration be submitted?
Starting from January 2023, the reporting obligations for Intrastat in the Netherlands have changed.
From now on, the Dutch Statistical Authority will notify taxable persons required to file Intrastat declarations based on monthly sampling of intra-Community transactions.
Taxable persons included in a sample receive a letter for this in the first month for which the declaration obligation applies.
The deadline for submitting Intrastat returns is the 10th working day of the month following the month for which an Intrastat return needs to be submitted.
INVOICING RULES IN THE NETHERLANDS
Does the invoice have to include VAT? Reverse charge?
As a supplier of goods or services, your company is normally obliged to issue an invoice with VAT to its customer. This is the general rule. However, there are many derogatory situations which transfer this obligation to pay tax to the customer himself. These situations are known as "reverse charge" situations.
The special reverse charge rules have been introduced in the Netherlands for foreign companies:
For supplies of goods:
The reverse charge is applicable to all domestic supplies of goods made by a business not established in the Netherlands (irrelevant if the supplier is registered or not for VAT), provided that the customer is a VAT taxpayer established in the Netherlands or a non-taxable legal entity established in the Netherlands.
For supplies of services:
The reverse charge is applicable to all domestic supplies of services made by a business not established in the Netherlands (irrelevant if the supplier is registered or not for VAT), provided that the customer is a VAT taxpayer established in the Netherlands or a non-taxable legal entity established in the Netherlands.
What VAT rate should be mentioned on an invoice?
The Netherlands has 2 differents VAT rates :
- Standard rate : 21%
- Reduced rate: 9%
VAT REFUNDS IN THE NETHERLANDS
How can I recover VAT in the Netherlands ?
There are several methods to obtain refunds of Dutch VAT. The practical formalities for reclaiming foreign VAT will differ depending on whether or not your company is established in Europe and/or is identified for VAT in the Netherlands:
- If your company has a VAT number in the Netherlands, it will have to submit a refund application in the form and within the timeframe required by local regulations. A VAT credit is not automatically carried forward to the next period. Refund is done immediately.
- If your company is established in a European country and does not have a VAT number in the Netherlands, it will have to apply for a VAT refund electronically from its country of residence, in the form and within the time limits required by Directive 2008/9.
- If your company is established outside Europe and does not have a VAT number in the Netherlands, it will have to appoint a tax representative to submit its refund application in the form and within the time limits required by the 13th Directive.
Is Dutch VAT recoverable on all expenses?
VAT incurred on purchases, imports or intra-Community acquisitions of goods and services can be reclaimed by a foreign company provided that these expenses are for taxable activities and provided that the appropriate documentation is available.
Usually, no input VAT can be recovered on food-related expenses.