Managing value-added tax (VAT) is an important part of doing business in the Netherlands. VAT rates vary depending on what you’re selling, and the rules for reclaiming VAT aren’t always intuitive. This tax can become more complicated if you’re handling cross-border sales or digital services.

Below, we’ll explain how to calculate VAT in the Netherlands, both on sales and purchases and when you claim deductions.

What’s in this article?

• What is VAT and how does it work in the Netherlands?
  
• How do businesses calculate VAT on sales and purchases?
  
• What VAT deductions can businesses claim?
  
• How does Stripe help Dutch businesses with VAT compliance?
  

What is VAT and how does it work in the Netherlands?

VAT is a tax on consumption that is charged at every step in the supply chain, from raw materials to the final product. Input VAT is the VAT businesses pay on purchases, and output VAT is the VAT businesses add to their sales. The system ensures that tax revenue flows continually to the government, while the customer pays the final cost.

This model works differently from sales tax, which is charged once at the point of sale to the end customer. VAT, by contrast, applies throughout the supply chain, with every business both charging and reclaiming it. That makes VAT less vulnerable to evasion and gives governments more reliable revenue.

More than 170 countries use VAT, which is called goods and services tax (GST) in some places such as Australia and New Zealand. While the core idea is consistent across countries—tax is added throughout the value chain—rates, exemptions, and thresholds vary. The US, which relies on state-level sales taxes rather than VAT, is an outlier.

In the EU, VAT systems are built on shared rules. Each country follows EU directives regarding basics such as rate minimums but also sets its own rates and determines which goods and services qualify for exemptions.

In the Netherlands, VAT is called “belasting over de toegevoegde waarde” (BTW) or “omzetbelasting.” There are three rates:

• The standard rate for most goods and services is 21%.

• The reduced rate for essentials such as food, books, and medicine is 9%.

• The zero rate (0%) is used mainly for non-EU exports.

Some goods and services are exempt, including education, healthcare, and financial services. These aren’t zero-rated; they’re outside the VAT system, which means no VAT is charged and businesses can’t reclaim VAT on related costs.

How do businesses calculate VAT on sales and purchases?

Businesses need to calculate and collect VAT on each of their VAT-eligible sales, then calculate their total output and input VAT at the end of each quarter to determine whether they owe a tax payment or are entitled to a refund. Here’s what that process looks like.

Identify the taxable amount

Start with the price of your product or service before VAT. That’s the amount you’ll apply the VAT rate to. For example, if you sell a service for €100 (exclusive of VAT), the taxable amount is €100. If VAT applies, you’ll add it on top.

Apply the correct VAT rate

Calculate either the standard rate, reduced rate, or zero rate VAT on each sale. Here are some examples:

• Software subscription (standard rate): €100 × 21% = €21 VAT

• Box of groceries (reduced rate): €100 × 9% = €9 VAT

• Exported machinery (zero rate): €100 × 0% = €0 VAT

The VAT rate you apply affects how much VAT you charge and whether you can deduct the VAT you’ve paid on related expenses. This is especially important when you distinguish between zero-rated and exempt sales: both result in no VAT on the invoice, but only zero-rated sales enable deductions.

Issue a VAT-compliant invoice

Dutch businesses are expected to be transparent about VAT, especially on B2B invoices. A VAT invoice should include:

• Your business name, address, and VAT number

• An invoice number and the date of issue

• A description of the goods or services provided

• The price per unit before VAT

• The VAT rate

• The VAT amount added

• The total price including VAT

Customer-facing prices often include VAT, but B2B VAT invoices must show detailed descriptions of what VAT was charged.

Track output and input VAT

Output VAT is all the VAT you charged your customers. Input VAT is all the VAT you paid on business purchases. At the end of each VAT period (usually quarterly in the Netherlands), you calculate how much VAT you owe by subtracting your input VAT from your output VAT.

If the result is positive, you pay the tax office the difference. If the result is negative, you’re entitled to a refund. Here’s a sample calculation of input and output VAT for a specific quarter.

Sales

• If revenue from laptops (21% VAT) was €10,000, then €2,100 VAT was collected.

• If revenue from books (9% VAT) was €2,000, then €180 VAT was collected.

• Total output VAT is €2,280.

Expenses

• The business paid €210 VAT for office supplies.

• The business paid €950 VAT for inventory (mixed goods).

• Total input VAT is €1,160.

Total Output VAT - Total Input VAT = €2,280 - €1,160 = €1,120

In this scenario, the business owes €1,120 to the tax office.

Exceptions

Not every sale fits the standard VAT model.

The reverse charge VAT mechanism applies if you’re selling to a VAT-registered business in another country and in certain domestic B2B scenarios, including construction work, foreclosure sales, and transactions that involve greenhouse gas emissions trading. When the reverse charge applies, the buyer, not the seller, reports and pays the VAT.

If you’re selling to customers in other EU countries, then the place of taxation depends on your total EU B2C sales. If your total EU sales are below €10,000 a year, you can continue charging Dutch VAT and file as usual. If you cross that threshold, you’re required to apply the VAT rate of the customer’s country of residence. You can use the EU’s VAT One Stop Shop (VAT OSS) to avoid registering in every country: VAT OSS lets you file a single VAT return that covers all B2C EU sales.

What VAT deductions can businesses claim?

The VAT you pay to other businesses is usually recoverable. If your business is registered for VAT in the Netherlands and your work involves taxable sales, you can reclaim the VAT you’ve paid on expenses that support those sales.

You can’t reclaim VAT if you’re selling VAT-exempt goods or services (e.g., healthcare, education, certain financial services). You don’t charge VAT to your customers so you can’t reclaim VAT on the costs involved in delivering those services. For example, a private health clinic can’t recover VAT on its equipment purchases if its medical services are exempt.

You also can’t reclaim VAT if you’re using the Dutch small business scheme. If you’ve opted into the Kleineondernemersregeling (KOR)—the VAT exemption for small businesses with annual turnovers of €20,000 or less—you don’t charge VAT, you don’t file VAT returns, and you can’t claim VAT back.

Businesses that can reclaim VAT still need to distinguish between which costs are and are not reclaimable. Some costs are fully deductible, others are partially deductible, and a few are not deductible at all. Businesses need to know where those lines are and maintain good records.

What you can deduct

If a purchase is entirely for business use and relates to your taxable sales, you can typically claim back all the VAT. Deductible purchases include:

• Raw materials and inventory

• Equipment and tools

• Software subscriptions and office rent

• Professional services (e.g., accountants, lawyers, freelance designers)

You can claim all these costs as input tax in your VAT return, reducing the amount of VAT you owe on your sales.

What you can partially deduct

Some costs are partly business related and partly personal. In those cases, you can reclaim VAT on only the business portion. For example, if you use a laptop partly for client work and partly for watching Netflix at home, you’ll need to estimate how much you use it for business. That percentage becomes your deductible portion.

What you can’t deduct

There are a few categories for which Dutch law either blocks VAT deductions outright or sets strict limits. These include the following:

• Gifts for your staff: If you give your staff gifts, you can deduct purchases up to €227 (excluding VAT) per employee each year. If you give beyond that, the deduction disappears.

• Personal expenses: Laptops, phones, vehicles, and software purchases that are entirely for personal use aren’t eligible for a VAT deduction.

Imported goods

If you bring goods into the Netherlands from outside the EU, you’ll be charged import VAT. In most cases, you can recover it in your next VAT return, just as with VAT on any other business purchase. To avoid paying the VAT immediately on import, you can apply for an Article 23 permit. This lets you account for the VAT in your next return.

How does Stripe help Dutch businesses with VAT compliance?

Complying with VAT rules can take up a lot of time and energy, especially if you’re selling across borders or managing high transaction volumes. Stripe’s tools don’t remove your legal obligations, but they can lighten your team’s workload surrounding VAT calculations and compliance.

Here’s how Stripe supports VAT compliance for Dutch businesses and anyone who sells in the Netherlands.

Stripe Tax

Stripe Tax automatically calculates the right VAT based on the product and the customer’s location. It assesses when to apply domestic VAT, when to skip it entirely, and when to collect VAT based on the buyer’s country. Stripe handles edge cases, too, including:

• Reverse charge rules for intra-EU B2B sales

• Nontaxable entities (e.g., nonprofits, exempt customers)

• VAT-exempt products or services

Tax thresholds

Stripe Tax monitors your sales volumes across countries so you don’t accidentally cross a VAT registration threshold without realizing it. If you’re a Dutch business that sells abroad, Stripe can keep tabs on EU and country-specific thresholds and notify you if you need to start collecting VAT in other countries.

Stripe Invoicing

Stripe Invoicing helps you generate invoices that meet Dutch VAT rules without requiring you to build your own system. If your customers rely on your invoices to reclaim VAT, these details matter.

VAT filing

When it’s time to file your VAT return, Stripe generates a summary of total VAT collected at each rate and sales by country for easy reporting on your return. Stripe does something similar for VAT OSS returns: it can show you which sales need to be included in which country’s VAT totals based on customer location.

Audit trails

Every sale processed through Stripe comes with a transaction record that includes:

• The VAT rate that was applied

• Whether VAT was collected

• Any customer-provided tax ID or exemption status

If the Dutch tax authority ever questions your numbers, you have clean, complete, and downloadable documentation at the transaction level.

VAT rule changes

Stripe updates its systems in response to tax changes, including EU shifts (e.g., updates to VAT OSS thresholds and processes) and country-level rate adjustments. If a new regulation is adopted, Stripe builds the update into its product, eliminating the need for you to monitor tax bulletins or recode your checkout.