Turnover tax (VAT)

If you start a business, you must register with the Dutch Chamber of Commerce. The Dutch Tax and Customs Administration will determine whether or not you are liable to charge VAT based on your expected turnover. The amount of VAT you have to charge or pay depends on the applicable rate for the service or product you supply: that may be high (21%), low (9%) or 0%. In some cases, your service or product will be exempt from VAT.

If you do not have a VAT number, you cannot levy VAT.

As an entrepreneur, you have the administrative burden to collect VAT and pass it on to the Dutch Tax and Customs Administration. You may offset the VAT on operating costs that you have paid yourself as an entrepreneur against the collected VAT.

You must keep record of the collected and paid VAT in your own bookkeeping. In the turnover tax return, you specify how much you have invoiced (excl. VAT) and how much VAT you have charged on that. You may subsequently deduct the input tax (the VAT that you paid for your business expenses) from that.

Please note: the VAT return is completely separate from the annual income tax return.

The small businesses scheme (Kleineondernemersregeling, KOR) is an exemption from VAT that you can request in advance. If you are based in the Netherlands and your normal taxed turnover is not higher than €20,000 per year, then you are eligible for this. You do not have to add the turnover that is exempt from VAT to this.

If you apply for the small businesses scheme, you no longer charge VAT. This means that you no longer specify this on your invoice, no longer pay this to the Dutch Tax and Customs Administration and, therefore, that you can no longer claim back input tax. You are also indemnified for administrative obligations for the VAT, so you no longer file any VAT returns. Find out more about this on the ‘Small businesses scheme’ page.