In the Netherlands, while the norm is for VAT to be levied on the provider of goods or services, there are circumstances where the responsibility to pay VAT is transferred to the recipient, known as the reverse charge mechanism.
According to the EU VAT Directive, specifically Articles 194–199b, reverse charge measures have been implemented across all EU Member States, including the Netherlands.
Read more about Reverse Charge and “Call-off stock” in The Netherlands in our comprehensive guide.
Article 12(5) of the Dutch VAT Act enforces a domestic “reverse charge” mechanism aimed at preventing tax evasion. This applies to specific domestic and cross-border transactions involving registered Dutch VAT payers. In scenarios where the domestic reverse charge applies, the supplier does not add VAT to the invoice, and the responsibility to report the VAT shifts to the registered recipient VAT payer.
The types of supplies subject to the domestic reverse charge are detailed in Articles 24b, 24ba, and 24bb of the VAT Implementing Decree. These include:
This measure ensures that the VAT on these supplies is accounted for by the recipient rather than the supplier.
Also, supplies of the following goods, if supplied in an amount equal to or greater than EUR 10.000 for each type of good:
Consignment stock refers to goods that are sent by a consignor to a warehouse and sold to a final customer through an intermediary called a consignee. Throughout this process, the consignor retains control over the stock, and the ownership is transferred to the consignee just before the stock is sold.
On the other hand, call-off stock pertains to products that a supplier transfers to a warehouse or storage facility. These products are intended for a specific customer, who can remove them from the warehouse at their convenience. Typically, the warehouse is either owned or managed by the customer.
Under certain conditions, providers from EU Member States may be exempt from registering for VAT in the Netherlands, thanks to a simplification measure. Up to January 1, 2020, various simplification strategies were in place. Post this date, one of the “Quick Fixes” introduced by Article 17a of the EU VAT Directive, transposed into Dutch law by Article 3b and corresponding articles in the Dutch VAT Act, aimed to standardize the handling of call-off stock across the EU.
Under these specific regulations, when a business transports goods to a warehouse in another EU Member State for eventual sale to a pre-identified buyer, the initial transfer is not considered a taxable transaction. Instead, the taxable event occurs at the point of the subsequent transfer of goods to the buyer. This subsequent transfer is treated as a zero-rated intra-Community supply by the entrepreneur to the buyer and an intra-Community acquisition by the buyer in the Member State of arrival. As a result of this simplification, the supplier is not required to register for VAT in the Member State where the goods end up, streamlining the process for cross-border trade within the EU.
For the call-off stock simplification under the EU VAT Directive to apply, several conditions must be fulfilled:
Call-Off Stock Registers: A taxable person that transfers goods or receives goods under call-off stock agreements must keep a register with specific information about the transaction and its counterparties.
Importing goods into the Netherlands is usually a charged occurrence for VAT purposes.
According to Article 21 of the Dutch VAT Act, items usually are excluded from import VAT if their supply within the Netherlands is either VAT-exempt or zero-rated.
Import VAT is also not charged on the following items:
• Travelers’ personal belongings (subject to certain restrictions);
• Imported household effects in connection with a change of address;
• Items brought in by ambassadors or embassies; and
• Imported capital items in connection with the transfer of business operations.
Other exemptions apply to the importing of the following items:
• Small non-commercial consignments of products valued less than EUR 45 sent between natural persons. Tobacco and tobacco goods, alcohol and alcoholic beverages, perfumes, eau de toilette, tea, and coffee, according to the amounts set by the Ministry of Finance, are also exempt.
• Gold as a reserve currency for central banks.
Temporary imports may also be excluded from VAT under specific circumstances.
Importing goods dispatched or carried to another Member State are also eligible for a VAT exemption (i.e., imports followed by an intra-Community supply).
Foreign providers from third countries may use the Import One-Stop Shop Scheme (IOSS) to simplify VAT payment on low-value goods imported into the Netherlands from July 1, 2021.
Goods imported into the Netherlands from outside the EU are liable to VAT, regardless of who imported them. In general, VAT is charged at the same rate on items imported from outside the EU as it is on commodities delivered in the Netherlands at the time of (physical) importation. In the Netherlands, only non-EU commodities, not services, are considered “imports” for VAT and customs reasons.
Under Article 1 of the Dutch VAT Act, products imported into the Netherlands from outside the EU are liable to VAT, regardless of who imported them.
Under Article 18 of the VAT Act, the following occurrences are also considered imports for VAT purposes:
• The importation of items that are not freely circulated in the EU into the Netherlands;
• The release or removal of items from a customs regime in the Netherlands; and
• The provisioning of transportation in the Netherlands concerning non-free-flowing products. Provisions, fuel, and commodities for onboard sale, for example.
Under Article 23 of the Dutch VAT Act, the importer usually is liable for any import VAT owed.
Unless the importation is free from VAT or a VAT deferment authorization is obtained, import VAT is paid to the Dutch Customs Authorities at the time of importation. Under Article 23 of the VAT Act, a VAT deferment license allows VAT reporting and payment to be postponed until the due date for the periodic VAT return for the period in which the import occurred.
Last Updated: 13/04/2022
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