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Doing business in Holland – VAT / Sales tax

After you successfully registered your business in Holland you start trading. Most trading or services are subject to VAT or sales tax. What does this imply?

That implies you have become a VAT entrepreneur. You charge your clients with VAT. This VAT amount you receive on top of your invoice you have to pay to the Dutch tax office. Most costs you make also contain VAT. That VAT you paid you can reclaim from the tax office. So basically you pay the balance of the VAT to the tax office. The VAT is therefore not levied from you, but from your clients.

If you sell to other entrepreneurs, then you are required to issue an invoice meeting the invoice requirements. If you sell (also) to private individuals, then you are not required to issue an invoice to private individuals. But if you do provide an invoice, this invoice needs to meet the invoice requirements.

The moment you sell goods or provide services outside the Netherlands, but inside the EU, then it is slightly different. All transactions are still subject to VAT, but only if the EU entrepreneur provides you with their VAT number, you can charge 0% VAT on the invoice. Private individuals are still due VAT on their invoice.

Selling goods outside the EU to entrepreneurs or private individuals is without VAT. Without VAT is not the same as VAT exempted. When you (also) have VAT exempted services/goods, then you can only reclaim pro rata the paid VAT. Selling outside the EU is not VAT exempted turnover, hence you can reclaim the full amount of paid VAT.

The sales tax/VAT administration is not complex, but you need to set it up correctly immediately and meet the filing obligations. We will be glad to assist you.

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