Handling value-added tax (VAT) in the Netherlands means understanding how the system
works, what rates apply to what transactions, and when you need to register. The rules are precise, and making a mistake can have real consequences for your business. Below, we’ll explain what you should know about VAT in the Netherlands: what it is, what it applies to, and what that means for your business.

What’s in this article?

• What are the current VAT rates in the Netherlands?
  
• How does VAT work for international transactions in the Netherlands?
  
• What are the VAT registration thresholds for businesses?
  
• What does calculating and collecting VAT entail?
  

What are the current VAT rates in the Netherlands?

VAT is a consumption tax that’s levied at each stage of a product’s or service’s delivery. The Dutch VAT system has three rates:

• 21% standard rate

• 9% reduced rate

• A zero rate

Each serves a distinct policy role. Here’s how they work in practice.

21% standard rate

This is the baseline rate applied to most goods and services in the Netherlands, including:

• Consumer goods such as electronics, furniture, and cosmetics

• Professional services such as legal advice, information technology (IT) consulting, financial auditing, architectural work, and marketing and advertising services

• Telecom and digital services such as mobile plans, internet access, and streaming platforms

• Alcoholic beverages

• Luxury and nonessential items such as high-end watches and jewelry

• General B2B services such as human resources (HR) consulting and event planning

The 21% VAT is included in the total price charged to customers, and businesses collect and remit this tax in their VAT returns. Input VAT (tax paid on business expenses) is generally deductible against VAT collected.

9% reduced rate

The reduced rate applies to goods and services considered socially or economically essential, including:

• Groceries such as bread, milk, vegetables, meat, and coffee

• Medicines and medical aids such as prescription drugs, approved over-the-counter medications, and certain health-related devices

• Books, newspapers, and magazines

• Food and nonalcoholic beverages in restaurants

• Passenger transport within the Netherlands such as buses, trains, and taxis

• Hotel stays and short-term accommodations

• Certain services on homes such as painting and plastering

• Repairs to consumer goods such as bicycles, shoes, and clothing

The policy goal here is to make essential services more affordable and to support sectors such as small-scale labor.

If your business sells a mix of products and services at different VAT rates (e.g., a restaurant that serves food and wine), you need to account for each item separately. Bundling items with different rates requires careful invoicing and VAT treatment.

Zero rate

The zero rate isn’t the same as a VAT exemption. It’s applied to taxable transactions that carry a 0% charge. With these sales, no VAT is added to the customer’s invoice, and the seller can still reclaim VAT on related inputs.

This rate covers:

• Services for the import and export of goods to non-EU countries

• Work on goods exported to non-EU countries

• International passenger transport

VAT-exempt

Goods and services that are VAT-exempt have no VAT added, and businesses cannot reclaim the VAT they pay in the production process. VAT-exempt categories include:

• Treatments provided by licensed healthcare professionals such as doctors and dentists

• Care services such as retirement and nursing homes

• Childcare provided by registered centers

• Education from recognized institutions, including vocational and arts education

• Financial services and insurance, including payment transactions, interest on loans, and insurance premiums

• Residential rent for homes and apartments

• Fundraising activities

How does VAT work for international transactions in the Netherlands?

VAT is a destination-based tax. That means it’s usually due where the customer is located, not where the seller operates. Here’s how it works.

Selling goods or services to customers outside the EU

These transactions are generally zero-rated. This is also true of export services such as the transport of goods outside the EU and related insurance. While you won’t owe VAT in the Netherlands, you could owe tax in the customer’s country.

Selling goods or services to businesses in the EU

When both businesses are registered for VAT, the general rule within the EU is that the reverse charge mechanism applies. You don’t charge Dutch VAT; instead, the buyer accounts for VAT in their home country.

Selling goods or services to customers in the EU

If your total cross-border sales to EU customers exceed €10,000 per year, you’re required to charge VAT based on the customer’s country, not your own. This applies to:

• Distance sales of physical goods (e.g., ecommerce)

• Digital services (e.g., software, subscriptions, downloads)

You can either register for VAT in each destination country or use the EU’s VAT One Stop Shop (VAT OSS) scheme and file a single quarterly return that covers all your sales to EU customers.

If your cross-border B2C sales remain under €10,000, you can continue charging Dutch VAT and report everything in your domestic return.

Buying goods from outside the EU

Import VAT is due at the point of entry into the Netherlands when you buy goods from outside the EU. However, companies can apply for an Article 23 permit to defer VAT payment, which means they declare it in their returns rather than pay it at customs.

Buying goods from other EU countries

These are treated as intra-Community acquisitions, and the reverse charge mechanism applies. There’s usually zero VAT payable, but reporting is required.

Selling into the Netherlands as a foreign business

If an EU-based business sells to Dutch customers and its sales exceed the EU-wide €10,000 threshold, it must apply Dutch VAT. The VAT OSS simplifies compliance by allowing the business to register in only one EU member state. The reverse charge mechanism applies for B2B sales within the EU.

If a non-EU business sells goods or services to Dutch customers, Dutch VAT usually applies.

Stripe Tax accounts for the VAT OSS. It tracks which country’s VAT applies, separates each jurisdiction’s totals for reporting, and prepares the data you’ll need to file a VAT OSS return. That means you don’t need to build a separate VAT calculation engine or manually re-sort invoices by country.

What are the VAT registration thresholds for businesses?

In the Netherlands, there’s no general revenue threshold that delays VAT registration. Most businesses are expected to register from Day 1 if they’re making taxable supplies. But there are a few exceptions and special schemes to be aware of, especially if your turnover is low or you’re based outside the country.

For Netherlands-based businesses

If you’re established in the Netherlands and plan to sell goods or services that are subject to VAT, you typically have VAT obligations right away. There’s no minimum annual turnover as there is in some other EU countries. Registration happens automatically in most cases when you register with the Chamber of Commerce. The Dutch tax authority will determine whether you’re an entrepreneur for VAT purposes and issue you a VAT identification number.

The only exception is if you apply for the small business exemption scheme or kleineondernemersregeling (KOR). If your business has an annual turnover of €20,000 or less, you can opt in to the KOR.

Under KOR:

• You don’t charge VAT on your sales

• You don’t file VAT returns

• You can’t deduct VAT on your business expenses

This scheme is optional. Some businesses and freelancers choose not to opt in, even if they’re eligible, because their clients are registered for VAT and want tax invoices.

If you opt in to KOR and later exceed the threshold, you must register for VAT and begin charging and remitting it from that point forward.

For foreign businesses that sell into the Netherlands

VAT registration rules differ depending on your location and what you’re selling.

If your business is established in another EU country and you’re selling to Dutch customers, you can sell under your local VAT regime until your total cross-border sales across the EU exceed €10,000 per calendar year. Afterward, you must apply the destination country’s VAT rate—in this case, Dutch VAT—and either register for Dutch VAT or use the EU’s VAT OSS system to report those sales. This is meant to minimize the registration burden for businesses that do occasional cross-border B2C sales.

If you run a non-EU business that sells goods or services to Dutch customers, there is no threshold and you must register for VAT immediately. If your business doesn’t have a permanent establishment in the Netherlands, you register for VAT directly with the tax office.

Stripe Tax monitors your cross-border sales volume and alerts you when you’re approaching country-specific thresholds that trigger new VAT obligations. For the EU, that includes the €10,000 annual threshold for B2C distance sales across all member states. Once you exceed a threshold, Stripe adjusts the VAT rate it applies so you stay compliant.

What does calculating and collecting VAT entail?

Being a VAT-registered business comes with the obligation to collect and remit VAT, as well as certain administrative duties that facilitate this process. Once you’re registered for VAT, here’s what you’re responsible for.

Calculating VAT

Calculating VAT in the Netherlands involves adding the applicable percentage to the sale price. For example, the standard 21% VAT on a €100 sale would come out to €21 VAT so the VAT-inclusive price would be €121. Many businesses rely on tools such as Stripe Tax to help with VAT calculations. Stripe can automatically calculate the correct VAT rate on each transaction, based on:

• The customer’s location

• The type of product or service being sold

• Applicable thresholds

If an EU business enters a VAT ID number, Stripe can validate it and apply the reverse charge mechanism automatically. If your catalog includes products or services with different VAT treatments (e.g., standard, reduced, exempt), you can tag each item with the correct tax category. Stripe will apply the appropriate rate in each country, based on that classification.

Invoicing and recordkeeping

If you’re registered for VAT, every invoice you issue must:

• Include your VAT ID number, invoice date, and a unique invoice number

• List a clear description of the goods or services

• Show the net amount, applicable VAT rate, and total VAT charged

You’ll also need to retain copies of all invoices for at least 7 years (or 10 if you’re working with real estate).

Filing VAT returns

Most businesses in the Netherlands file VAT returns quarterly, and the tax authority will tell you how often you need to file. Each return includes:

• VAT charged on sales (output tax)

• VAT paid on business expenses (input tax)

If your input VAT is higher than your output VAT, you’ll be eligible for a refund. If your output VAT is higher, you’ll owe VAT.

Tracking sales and expenses

You’ll need a process, either manual or automated, for tracking every sale and expense, separating VAT from gross amounts, and filing on time. Accounting software can simplify managing all your input and output VAT. Stripe Tax generates tax reports that break down VAT collected by country and rate, total taxable sales by location, and which transactions were taxed, exempt, or subject to reverse charges. These reports can be exported and used to file domestic or VAT OSS returns. If you use accounting or filing tools that integrate with Stripe, you can import this data directly into your compliance workflows.

Either way, compliance is mandatory, and mistakes can lead to fines, interest charges, or lost deductions.

Managing cash flow

VAT compliance also affects cash flow. Since you collect VAT on behalf of the government, that money isn’t yours to spend, even though it’s in your account. Businesses often set aside the VAT they collect from each payment in a separate account to avoid shortfalls when it’s time to file.

If you have substantial up-front expenses (e.g., new equipment), you might end up with a VAT refund. This can be helpful early on, especially when you’re investing in the business before you see much revenue.