The Netherland's VAT policy is based on the "destination principle" of the European Union VAT system. This means that VAT, or belasting toegevoegde waarde in Dutch, is payable to the country's government where the product or services are consumed, regardless of where you're supplying them from.
If you have clients in the Netherlands, you have to comply with Dutch VAT rules. VAT is administered by the Tax and Customs Administration (Belastingdienst Nederland), the tax collection and customs service of the government of the Netherlands.
The standard VAT rate in the Netherlands is 21%, with reduced rates of 9% and 0% applied based on the products you sell. This guide includes everything you, as a freelancer, need to know about VAT in the Netherlands in a nutshell. Let's get started!
The Dutch government levies three different VAT rates, and freelancers must charge the amount that applies to their products and services.
It is mandatory to charge VAT when invoicing your clients in the Netherlands. There are, however, some exceptions: if you teach educational courses or provide educational training, work in medical services and products, etc. You can find an extensive list of exempted professions, goods, and services here (in Dutch).
There is no threshold for VAT registration for freelancers in the Netherlands. Therefore, as long as you have customers and business activity in the country, you are liable to charge VAT.
Non-residents of the Netherlands can trade in the country without establishing a local company there. However, individuals registered in the EU and distance-selling goods to the Netherlands do have a registration threshold of €100,000. Once their annual turnover exceeds this amount, they must register for VAT.
You can click here for more information on when to register for VAT in the Netherlands.
To register for VAT, you must first register your freelance activity with The Kamer van Koophandel (KvK), the Dutch Chamber of Commerce. The Trade Register of the Commercial Chamber will then transfer your information to the tax authorities to register for VAT. The process takes around five days, and you will then receive your VAT number. You are liable to pay VAT to the government starting from the date you register.
Expat freelancers supplying goods or services in the Netherlands must also register with the Dutch Chamber of Commerce.
You can also register using the Mini One-Stop-Shop, an EU-wide tax system that allows you to consolidate all of your EU VAT in one single tax return. This scheme is optional but convenient and especially useful if you have customers in multiple countries within the EU, including the Netherlands. MOSS allows you to avoid registering in each Member State of consumption. To learn more, click here.
Lastly, you can hire an accountant (or agency) to handle your VAT returns and dealings with the Dutch Tax Administration. Xolo provides services like Xolo Go and Xolo Leap, which help with precisely this and any other VAT concerns you may have.
Registering for VAT is only part of the process; in order to to be fully VAT compliant, you must:
VAT invoices are the official record of how much tax you charge and collect, and therefore the official proof of how much tax you owe the government. You must make sure to include the following in your Netherlands VAT invoices:
The invoices must be issued within six months of delivering your product or service. You must then store these invoices electronically for ten years. Does that sound overwhelming? We've got you! Xolo automatically generates, sends, and stores all your invoices digitally, so you won't have to worry about misplacing them over the next decade.
Why submit your tax reports with help from certified tax consultants? Learning all the Dutch tax guidelines can be challenging, especially if you're a sole proprietor and in charge of several aspects of your business. Luckily, at Xolo, we offer a range of solutions that can handle all the paperwork and legal jargon, allowing you to focus on your core competencies.
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Xolo Go is a quick and efficient way for freelancers who don't have a registered LLC or sole proprietorship to invoice clients legally.
So connect with us immediately, and we'll help you get your one-person business up and running in the Netherlands in no time!