In the Netherlands, the value-added tax (VAT) you charge—usually 9% or 21%—can have a real impact on your pricing, profit margins, and compliance. With real gross domestic product (GDP) growth in the Netherlands forecast to rise to 1.3% in 2025 (driven largely by domestic demand), it’s important that business owners understand how VAT applies to what they sell.

Many business owners are aware of VAT, but it can be difficult to understand how the two rates apply in everyday transactions. When you classify goods and services, it’s easy to make mistakes. Below, we’ll explain what falls under 9% and 21% VAT, where the boundaries are, and how to stay compliant.

What’s in this article?

• What’s the difference between 9% and 21% VAT in the Netherlands?
  
• When should you apply the 21% VAT rate?
  
• Which goods and services fall under the 9% VAT rate?
  
• How do you know which VAT rate applies to your business?
  
• What common VAT mistakes do businesses make?
  
• What’s the correct way to show VAT on invoices?
  
• How can you automate VAT calculations and reduce errors?
  
• How Stripe Invoicing can help
  

What’s the difference between 9% and 21% VAT in the Netherlands?

The Netherlands uses 2 main VAT rates: 21%, the standard rate, and 9%, the reduced rate for certain goods and services.

The 9% VAT rate is designed to lower everyday costs and support local, labor-intensive work. It’s applied to essentials (e.g., food, books, medicines, public transport), as well as activities that are socially beneficial (e.g., nonalcoholic drinks in restaurants, e-books, haircuts).

The 21% VAT rate is the default. If your product or service doesn’t clearly fall into a reduced or exempt category, you charge 21%.

When should you apply the 21% VAT rate?

If your product or service isn’t explicitly listed as reduced (9%) or exempt, 21% is your default rate.

Sales charged at 21% VAT include:

• Retail and ecommerce (clothing, electronics, cosmetics, furniture, and similar consumer goods)

• Professional services (legal, financial, design, marketing, and IT consulting)

• Digital products and subscriptions (SaaS platforms, streaming services, mobile apps, and cloud storage)

• Luxury and nonessential items (alcohol, jewelry, and high-end goods)

New businesses should start by confirming they qualify for a reduced rate or exemption, or need to charge 21%.

Which goods and services fall under the 9% VAT rate?

The 9% VAT rate in the Netherlands is meant for essentials and services that contribute to daily life, culture, or community well-being.

Those include:

• Food and groceries (bread, milk, meat, vegetables, coffee, and tea)

• Hospitality (food and nonalcoholic beverages from restaurants, cafés, and catering)

• Health-related products (prescription medicines, many over-the-counter drugs, and medical aids)

• Books and media (printed books, magazines, newspapers, e-books, and digital news subscriptions)

• Arts, culture, and sports (tickets for museums, theaters, concerts, and cinemas)

• Domestic domestic transport (bus, tram, train, and taxi)

• Campsites

• Home maintenance (painting and plastering homes that are more than two years old, plus certain insulation and repair work)

• Repair and personal services (bike, shoe, and clothing repairs, as well as hairdressing)

• Floricultural products (cut flowers, potted plants)

If you sell items in both categories (e.g., a café that serves food and wine, a retailer that offers books and e-readers), you must separate the 9% and 21% portions clearly on the bill.

How do you know which VAT rate applies to your business?

The right VAT rate depends on what goods or services you’re selling. If you’re unsure, check the Dutch tax authority’s website or ask a tax adviser before you finalize your pricing model.

Here’s a simple framework:

• Digital and professional services: 21%

• Food, cultural, or transport services: 9%

• Educational or financial services: Exempt from VAT altogether

Some industries mix rates. For example, restaurants split food (9%) from alcohol (21%), and bike shops separate sales (21%) from repairs (9%). While some healthcare costs are exempt from VAT altogether, medication sales are taxed at 9%. Your invoicing and accounting setup should reflect those splits clearly.

Classify every product once, confirm it against the official rules, and document your reasoning.

What common VAT mistakes do businesses make?

Some VAT mistakes tend to appear repeatedly among Dutch businesses, from freelancers to online platforms. Here are common mistakes you should watch for:

• Charging the wrong rate: Misclassification can lead to back taxes, penalties, or refund difficulties. Keep an up-to-date product list with the correct rates, and verify each item against the tax authority’s current tables.

• Skipping VAT registration: Some small businesses assume that low revenue means no VAT. Unless you’ve officially opted in to the small businesses scheme, you must register, charge VAT, and file returns.

• Generating faulty invoices: Missing or incorrect VAT numbers, mismatched rates, or missing totals make invoices noncompliant, and they prevent B2B customers from reclaiming input VAT.

• Keeping insufficient records: Lost receipts, incomplete logs, or mismatched filings can trigger audits or fines.

• Missing deadlines: You can file VAT returns monthly, quarterly, or yearly (quarterly is the most common). Late filings could result in penalties.

Use reliable accounting tools, set calendar reminders, and review each return before you submit it.

What’s the correct way to show VAT on invoices?

A Dutch VAT invoice is a legal document that serves as evidence of your transaction and your tax position. To stay compliant, every invoice needs to include the correct details.

These are the minimum requirements for a VAT invoice:

• Your business name, address, VAT ID (btw-idnummer), if you’ve enrolled in the chamber of commerce, add your business id (KVK-nummer)

• The invoice date and a unique invoice number

• The customer’s name and address (and VAT ID, if it’s a B2B sale within the EU)

• A clear description of the goods or services provided, plus the delivery date if it differs from the invoice date

• The net amount, VAT rate, and VAT amount for each item or group

• The total including VAT

If a transaction is exempt from VAT, zero-rated, or under the reverse charge mechanism, note this explicitly (e.g., “btw verlegd” for domestic reverse charge).

For B2C sales, a simplified VAT-inclusive receipt is usually fine. But for B2B invoices, be as precise as possible. A missing VAT rate or ID number can invalidate the invoice and block your customer from reclaiming their VAT.

How can you automate VAT calculations and reduce errors?

VAT compliance can get complicated when you manage it by hand so start with the right tools. Stripe Tax, for example, can automatically calculate the correct VAT rate based on what you’re selling and where your customer is located. That includes distinguishing between categories, applying exemptions, and updating rates when laws change. Your accounting or invoicing software should also automatically reflect Dutch VAT rules: it should show the correct line items, totals, and invoice formatting without manual intervention. Many tools generate VAT summaries you can use directly when you file returns.

Automation also helps with cross-border rules. Stripe Tax can track your EU-wide sales and alert you when you approach thresholds for VAT registration in other countries.

How Stripe Invoicing can help

Stripe Invoicing simplifies your accounts receivable (AR) process—from invoice creation to payment collection. Whether you’re managing one-time or recurring billing, Stripe helps businesses get paid faster and streamline operations:

• Automate AR: Easily create, customize, and send professional invoices—no coding required. Stripe automatically tracks invoice status, sends payment reminders, and processes refunds, helping you stay on top of your cash flow.

• Accelerate cash flow: Reduce days sales outstanding and get paid faster with integrated global payments, automatic reminders, and AI-powered dunning tools that help you recover more revenue.

• Enhance the customer experience: Deliver a modern payment experience with support for 25+ languages, 135+ currencies, and 100+ payment methods. Invoices are easy to access and pay through a self-serve customer portal.

• Reduce back-office workload: Generate invoices in minutes and reduce time spent on collections through automatic reminders and a Stripe-hosted invoice payment page.

• Integrate with your existing systems: Stripe Invoicing integrates with popular accounting and enterprise resource planning software, helping you keep systems in sync and reduce manual data entry.

Learn more about how Stripe can simplify your AR process, or get started today.