Doing Your VAT in The Netherlands: What Expats Should Know

We’d like to thank Martin Van Wingerden and Celine Vink from Blue Umbrella for helping us put this guide together.

If you go the freelancing or startup route, you need to know about Value Added Tax (VAT). The stakes can be quite high: fines, audits, and admin chaos can ruin your business before it begins.

To help, we spoke with Dutch VAT experts Celine and Martin from Blue Umbrella, a firm with more than 50,000 tax returns under its belt. Here’s what you need to know to handle Dutch VAT, manage international VAT, and avoid mistakes.

Registration, KVK, and Your Two VAT Numbers

Whatever type of business you set up, sole trader (eenmanszaak) or private limited company (BV), you’ll soon face Dutch VAT.

When you start a sole proprietorship, your first stop is the Dutch Chamber of Commerce (Kamer van Koophandel, or KVK). Once registered, the KVK forwards your details to the Belastingdienst, which creates your tax profile and mails your paperwork.

For sole traders, the Dutch Tax Office actually issues two separate VAT numbers:

• Private VAT Number (Omzetbelastingnummer): This one includes your personal Citizen Service Number (BSN). Because it contains sensitive personal information, it’s meant only for private contact with the tax office and for sending your quarterly tax returns.
• Public VAT ID (Btw-identificatienummer): Your public business identifier. You put it on your website, share it with suppliers, and print it on invoices.

If you set up a private limited liability company (BV), the process starts with a Dutch notary. BVs then receive one general entity registration number (RSIN) and a standard corporate VAT identifier.

What Is Dutch VAT?

VAT is a tax levied on goods sold and services delivered.

You don’t “pay” VAT, or keep it. You function as a ‘middleman’ between the end user and the Dutch Tax Office.

Here’s how. Say you sell a chair for €100 and add 21% VAT. You charge your customer €121 total. That extra €21 isn’t yours — you park it and report it to the tax office each quarter.

Determining VAT per transaction can get complicated. Some important factors are:

• Whether you are selling goods or providing services (things like books or selling skills)
• Who your customers are (are you selling to consumers or businesses?)
• Where these entities are located (the Netherlands, Europe, or outside Europe?)

VAT Rates

The Netherlands has a standard rate of 21%, which applies to most goods and services. There is also a 9% rate for essential goods and selected services, such as food, non-alcoholic beverages, public transport, books, etc. Then the 0% rate, which is more for import and export purposes. The VAT still applies, but the rate is 0%. More on this below.

You can also apply a reverse charge for certain transactions, so the VAT liability shifts to the client, and they declare and pay it in their country. Some services are VAT-exempt — no VAT is charged.

Read Also: Dutch Citizens Rally Against Sweeping VAT Increases

Dutch VAT: Important Things To Know

Certain services are VAT-exempt for public interest. Services related to education or medical experts can be VAT-exempt.

Check the criteria. It’s not always the case that you are VAT-exempt if you practice something in education or consider yourself a medical professional.

As Celine puts it: “The criteria for this is quite specific. So, be careful when deciding whether your services are VAT-exempt. If it is the case that you are providing VAT-exempt services, you do not charge VAT to your customers. That means you are completely out of VAT’s scope. You can also then not claim back VAT paid on your business expenses.”

Martin adds, “There is a difference between the 0% VAT rate and being VAT exempt. It is quite confusing because with both of these you do not charge VAT to your customers.”

Although the VAT rate is 0%, you can still reclaim the VAT you pay on business expenses to suppliers. With ‘Exempt,’ you don’t charge VAT to your customers, and VAT paid to suppliers cannot be reclaimed.

The Small Business Scheme (KOR)

The Dutch Small Businesses Scheme (kleineondernemersregeling, or KOR scheme) is a scheme you can apply for if your annual turnover is less than €20,000, and you’re a Dutch registered company. Once you apply and are eligible, you become VAT-exempt, but you still have to apply. It’s not automatic.

Watch the €20,000 threshold, because when you expect to exceed it, you need to deregister from the KOR scheme and charge VAT. It reduces admin because you don’t charge VAT, so no reclaiming is required. However, Celine warns that you cannot reclaim VAT paid on your business expenses, and it can alter price positioning. “This is something that your customers might not expect.”

Reclaiming Dutch VAT

You can reclaim VAT paid on business expenses. But it must be Dutch VAT, and you must have a valid invoice.

The 90% Business Rule

The expense must be used for more than 90% business purposes to be considered a business expense. If you use something for more than 90% personal use, it is a personal expense, and you cannot reclaim the VAT.

Mixed Expenses

Sometimes things sit in the middle, like your mobile data for personal and business use. The Belastingdienst normally accepts a 50/50 split.

VAT cannot be reclaimed if:

• It’s a personal expense.
• You paid VAT on food and drinks.
• VAT paid on business gifts.
• On non-Dutch VAT.
• You don’t have a VAT-taxable activity.

Invoices: What To Include

In the Netherlands, invoices need to contain:

• Your company’s name and address.
• Your client’s name and address.
• Your client’s VAT number.
• Your public VAT number.
• Your KVK.
• The invoice creation date.
• The invoice number (you allocate this).
• Description of the services provided or goods sold.
• The price.
• Rate of VAT (21%, 9%, 0%, reverse charged, or exempt).
• The total VAT charged and the total including VAT.
• Your business IBAN.

Getting Your Filings Done, Meeting Deadlines, And Avoiding Penalties

VAT filings are quarterly, with the filing and payment deadline one month after the quarter ends (e.g., April 30 for the Q1 period of January 1 – March 31).

The invoice date leads for the quarter, not the date payment is received.

The VAT Filing: When And How

The first filing must be made in the quarter that you registered your business. The last filing should be in the quarter you deregistered. Filing and payment deadlines are the same. You need to be proactive. The Dutch tax office will not send you reminders; they will only send fines and penalties if you don’t.

Even with no sales, no expenses, and no VAT to be reclaimed, you file a zero return (Nul-aangifte).

International VAT: EU, Non-EU, ICP, and One-Stop Shop (OSS)

An extra layer of complexity comes when you invoice across borders, and it matters if your client is a business (B2B) or consumer (B2C).

EU B2B Transactions

For supplying services or selling goods to a business in another EU country, you:

• Use the Reverse Charge method (Btw verlegd).
• Put your customer’s verified VAT number on the invoice, and the note: “VAT reverse charged to customer.”
• Charge no Dutch VAT.
• Report these dealings via a quarterly ICP filing (Intracommunautaire Prestaties), along with your usual VAT submission.

EU B2C Sales

If you sell digital services like automated downloads, online courses, software hosting, or physical goods directly to private consumers across the EU, these rules apply:

• The €10,000 Threshold: If cross-border EU B2C sales stay below €10,000 annually, you apply the normal Dutch VAT rate.
• Exceeding €10,000: Once cross-border EU B2C sales go over the €10,000 limit, you charge the VAT rate that belongs to your customer’s country of residence.
• The OSS Solution: Instead of registering with tax authorities in each EU state, you can use the One Stop Shop (OSS) arrangement. You register with the Dutch Tax Office, and then you submit a single quarterly OSS declaration in the Netherlands. Afterwards, the Dutch Tax Office passes along the international VAT amounts to the EU countries.

Transactions Outside The EU

For B2B clients outside the EU, services are usually treated as subject to a 0% rate.

Zero Filings

Again, if there is nil activity, sales, or business expenses in any quarter, you still submit a zero filing (Nul-aangifte). A missed quarter means administrative penalties.

Penalties for Missing Deadlines

• Default Tax Assessment (Naheffingsaanslag): the tax office issues an estimated tax bill, often based on €5,000.
• Late Filing Penalties: fines begin at about €82 per late return.
• Late Payment Interest & Penalties: a percentage penalty, with a minimum of €50, is applied on top of unpaid tax liabilities.

Final Thoughts For Founders

Dutch VAT is intimidating, but once you grasp the basics (the 90% rule and international VAT), your business is likely to remain compliant. Partnering with experienced international tax advisors, like Blue Umbrella can help shift the admin burden and keep you in the legal lane, while you focus on running your business.