LOCAL VAT MEASURES FOR FOREIGN COMPANIES IN THE NETHERLANDS
Since 01/01/2020, the European simplification regime for call-off stock arrangements ("2020 Quick Fixes") entered into force and is to be applied by all Member States. This implies that all other possible national arrangements regarding call-off stock arrangements are mute and, if they provide for divergent rules, should be viewed as not in line with EU Law.
Simplification measures applicable for call-off-stock arrangements in The Netherlands up to 31/12/2019 have been withdrawn and replaced by the new European simplification VAT regime in respect of call-off stock accordingly.
Triangulation can be applied when the middleman (B) is VAT registered for others supplies in the 3rd country (Member State of destination)?
Triangulation simplification measures can be applied even if the middleman B is VAT registered as a non-established company in the Netherlands [Member State C].
Triangulation can be applied when the chain transaction involves four or even more parties?
Triangulation scheme is not applicable in chain transaction involving four or even more parties.
Chain transactions refer to successive supplies of goods which are subject to a single intra-Community transport. The intra-Community movement of the goods should only be ascribed to one of the supplies, and only that supply should benefit from the VAT exemption provided for the intra-Community supplies. The other supplies in the chain should be taxed and may require the VAT identification of the supplier in the Member State of supply.
However, the divergent approach amongst Member States in the application of these exemptions for cross-border transactions has created difficulties and legal uncertainty for businesses.
Optional reverse charge for supply of goods?
Reverse charge does basically apply to supplies of goods carried out by suppliers not established in the Netherlands provided the customer is a taxable person established in the Netherlands or a non-taxable legal entity established in the Netherlands.
Optional reverse charge for supply of services
Reverse charge does basically apply to supplies of services carried out by suppliers not established in the Netherlands provided the customer is a taxable person established in the Netherlands or a non-taxable legal entity established in the Netherlands.
See also our newsletter: "Domestic reverse charge in the Netherlands - Not necessary to get a Dutch VAT number from your customer?"
Optional reverse charge (art. 194 of the VAT Directive)
Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.
VAT Warehousing implemented in The Netherlands?
Yes
The Netherlands has introduced VAT warehousing regime applicable under specific conditions.
VAT Directive
Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.
Is it possible for a company to pay the import VAT via the periodical VAT return?
Yes
Postponed accounting via the VAT return is possible.
As foreign entrepreneur you are not able to apply the reverse-charge mechanism over the import of goods from non-EU countries. However you are able to make use of a tax representative. Such a representative is able to apply the reverse-charge mechanism on import from non-EU countries on your behalf. In such cases you will not be required to pay Customs the VAT on the import declaration. If you do not have a tax representative, then you will be required to pay Customs the VAT on the import declaration.
The reverse-charge mechanism on import means that you are not required to pay the VAT on import immediately. The VAT can then be paid when you file your VAT return. In order to do this, an Article 23 permit is needed which requires for a foreign business to contract a tax reppresentative. The latter will declare the VAT that you are required to pay on the VAT return for that period and will deduct this VAT as input tax on the same VAT return. Then you will not be requited to pay this VAT in advance on import.
VAT DIrective
Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return to be submitted.
VAT OBLIGATIONS IN THE NETHERLANDS
How is the tax period determined in The Netherlands?
Monthly/Quarterly/Yearly
Your company has to report its VAT position by filing periodical VAT returns on a quarterly basis [standard tax period]. Monthly reporting period can be opted for [or imposed by the tax authorities] if 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.
When should periodical VAT return be filed?
Periodical VAT returns must be submitted by electronic means to Dutch VAT authorities before the end of the month [last day of N+1] following the tax period. 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].
VAT Directive
The tax period shall be set by each Member State at one month, two months or three months. Member States may, however, set different tax periods provided those ones do not exceed one year. The VAT return shall be submitted by a deadline to be determined by Member States. That deadline may not be more than two months after the end of each tax period.
Is this requirement laid down in the country and what is the filing deadline?
Your company is not required to file any summarizing annual VAT return in the Netherlands.
VAT Directive
Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year. That return shall provide all the information necessary for any adjustments.
Are quarterly filings allowed by the country and what is the filing deadline?
The recapitulative statement [ESL] must be drawn up for each calendar month provided the threshold of € 100,000 of intra-EU transactions per quarter has been exceeded [01/01/2016: € 50,000]. Otherwise, periodicity is determined on a quarterly basis. ESL must be filed by electronic means before the last day of the month following the reporting period [month/quarter] to which it relates.
VAT Directive
The recapitulative statement shall be drawn up for each calendar month. However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency. The recapitulative statement shall be submitted within a period not exceeding one month.
What is the payment deadline?
The VAT due should be paid by filing deadline for the VAT return to which it relates.
Are interim payments required?
Interim payments are not required.
VAT Directive
Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. Member States may, however, set a different date for payment of that amount. Member States may require interim payment to be made.
Is any VAT credit automatically carried forward or refunded?
A VAT credit is automatically refunded by Dutch VAT authorities. No carry-forward mechanism.
VAT Directive
Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.
VAT OVERVIEW IN THE NETHERLANDS
What is the local name of the tax?
Omzetbelasting [BTW, OB]
What is the structure of the VAT number?
Dutch VAT numbers have 14 characters [NL + 9 digits + B + 2 digits].
VAT Directive
Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services. Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.
VAT rates
The Netherlands applies a standard VAT rate of 21% and one reduced rate of 9%.
The declaration threshold for trade with EU member states has changed from € 1,000,000 to € 800,000 for imports (ICV) from EU member states and from € 1,200,000 to € 1,000,000 for exports (ICL) to EU member states as of January 1, 2021.
The INTRASTAT declaration threshold for 2021 is set forth as follows:
- Companies that exceed the threshold in 2021 will be informed by Statistics Netherlands via letter.
- Companies that in 2020 exceeded the annual threshold of € 800,000 for imports (ICV) from EU member states or € 1,000,000 for exports (ICL) to EU member states, will receive the obligation to provide Statistics Netherlands with a declaration for 2020.
The threshold applies separately for imports and exports: a company with a yearly import value (ICV) of € 900,000 and an export value (ICL) of € 800,000 need only provide Statistics Netherlands with the import data.
Only companies that have trade between € 800.000 and € 5.000.000 in Intra Community Arrivals and/or between € 1.000.000 and € 5.000.000 in Intra Community Dispatches can put in a yearly declaration. The companies that are allowed to make a yearly declaration will be informed by Statistics Netherlands via letter
Official intrastat website
€ 100,000
see various thresholds applied in the EU
Any VAT question for The Netherlands?
We offer you the opportunity to discuss the subject during a free videoconference.