If you are an entrepreneur, you have to deal with VAT. VAT is short for Value Added Taxes − in Dutch known as BTW − and is mainly based on the physical transport of products and the supply of services. VAT in the Netherlands comes in different rates.
An entrepreneur pays VAT on his turnover. Usually this VAT is calculated to the customers. An entrepreneur can deduct the VAT from purchases and costs made. But when are you an entrepreneur for VAT? You are an entrepreneur for the VAT if you independently carry out a business or a profession. A Dutch holding company can under circumstance be regarded as an entrepreneur for Dutch VAT purposes.
Dutch VAT exemptions
A certain number of transactions, mostly in the financial and property business, but also in the medical and education sector, are tax exempt. Usually, this means that if you’re active in such a line of business, you are not allowed to charge Dutch VAT on your invoices. And besides that, your input VAT is – in part or in whole – not refundable. Moreover, holding companies in the Netherlands that do not perform any business activities are also not allowed to claim input VAT as they are not considered to be an entrepreneur.
It may occur that your company performs both taxable and exempt transactions. If this is the case, it is only allowed to deduct input VAT to the extent it relates to taxable transactions (pro-rata calculation). And this can be a really difficult task. To prevent time-consuming and costly mistakes, it is recommendable to get a clear view regarding the situation in advance. We can assist you during this process: we can provide you with valuable advice, which we also can perform for your company. Read more about our services below.
Dutch VAT services
As being stated above, it can be difficult for a foreign company to learn the ins and outs about Dutch VAT. That’s why we assist many companies with our knowledge regarding VAT exemptions, VAT deductions and VAT in general, so we can help them prevent making time-consuming and costly mistakes. Feel free to contact our team of VAT specialists. They can help you out with any questions regarding the subjects stated above.