VAT on export: Dutch legislation
When you export goods and services abroad, you often face fiscal regulations in both the country where you are exporting to and the Netherlands. Often, agreements are made between countries to ensure the payment of VAT on export in both countries is done correctly. Although authorities try to make it easier for entrepreneurs to do international business where possible, it is often difficult to determine where exactly you will need to pay, reclaim and register. This article will help you by listing the most important regulations.
Sales of goods to a different EU-country
When you, as an entrepreneur, sell goods abroad, you are dealing with a so-called intra-community shipment. The turnover taxes are charged abroad, and therefore the 0% rate is applicable in the Netherlands. The VAT liability is then extended from you to your client. When shipping abroad, you will need to state a VAT rate of 0% on your invoice. Then, you will need to submit the shipment as ‘Opgaaf Intracommunautaire Prestaties’ (Declaration Intra-community Results).
We can speak of an intra-community shipment when:
- You as an entrepreneur ship, or outsource shipping, to a different EU-country.
- The foreign client owes VAT for the acquisition of these goods.
When you do not meet these conditions, you will still need to charge Dutch VAT with your client.
Taxation VAT on export
The shipment is taxed in the country where the goods are at the moment of shipping. The location where you are selling the goods (from the Netherlands or somewhere else in the EU), determines where the taxation takes place. For example, when you are selling goods from the Netherlands to a client in Germany for €500,- the invoice will state:
VAT 0% €0
Selling to foreign parties without a VAT-number
When you have a company and are selling goods to foreign private individuals or legal entities, you will add VAT to your invoice. The rate of the VAT is generally dependent on the regulations of the country to which you are shipping. However, below a certain amount - the so-called threshold amount- you can charge Dutch VAT rates. The threshold amounts differ per country. Check when shipping to parties that do not pay VAT (like private individuals) always what the threshold amount is of the country in question. This way you can prevent an incorrect VAT amount on your invoice. An overview of all threshold amounts per country (in English) can be found here.
Pay attention: when you export goods to individuals (mostly: e-commerce) in several different EU countries, from July 1, 2021 you can make use of the One Stop Shop (OSS). This allows you to centralize your VAT declaration in different EU countries in one place. Does the OSS (possibly) apply to your business? You can read all about it here.
Depending on the type of goods (e.g. excisable or used goods) supplemental rules apply. Read more about the exceptions for specific goods and unusual situations here.*
Sales of goods outside of EU
When exporting goods to non-EU-countries you generally charge 0% VAT. To apply the 0% VAT rate you will need to demonstrate that the goods are actually exported. It does not matter whether the goods are shipped to a private individual or a company. The invoices outside the EU are more simplified than those inside the EU. However, administrative obligations are also connected to this. The shipment will need to be added to your declaration of turnover tax.
Are you providing services abroad, and would you like to know where, and how much VAT on export you will need to pay? Almost the exact same rules apply as for goods. In the EU you generally charge Dutch VAT to private individuals. Are you providing to an entrepreneur? Then, the service is generally taxed abroad. Your client will have to calculate the VAT themselves and pay in their own country.
When you provide services outside the EU, then those are often taxed with 0% VAT. However, for this there are also exceptions, and it is important to check the VAT for your specific situation. With the Tax Authority Tool (in Dutch) you can check this. In the tool the services that are exempt from the above-mentioned guidelines are included.
VAT on digital services
The foremost exceptions to the VAT rates when providing services abroad apply to digital services. For this (telecommunication, broadcasting and electronic services) you will pay taxes in the country where the client resides. Are you providing to private individuals in several EU-countries? Then, with the Mini One-Stop Shop regulation (MOSS, the precursor of the earlier mentioned OSS) you can declare the VAT in just one EU-country. Are you providing digital services to private individuals in EU-countries and has the revenue over the past two years been less than €10.000? Then, you will need to declare and pay VAT over these services. When you provide digital services, the VAT charge is dependent on who and where you are providing that service. For business clients and outside the EU this is always the foreign country.
Learn more about the fiscal regulations and VAT in the Netherlands on the Tax Authorities website. Or read more about reverse-charging VAT here. Are you importing goods or services, and would you like to know more about the VAT regulation? You can read more here. If you are doing business between the UK and the EU, this article explains about the consequences of Brexit on trade and VAT on export.