VAT rate dancing classes in The Netherlands
When you are a self-employed professional and teach dancing in The Netherlands, sometimes you have to invoice with VAT, and sometimes you invoice without. Whether you invoice VAT depends on the age of your students. Are they younger than 21 years old? Then your classes are exempt from VAT. But what if the student turns 21 during the course? And what else do you need to know about your VAT declaration as a dance teacher? Because for some activities you will need to charge the high VAT rate and for other activities the low rate. Are VAT and dancing confusing? Lexlupa will explain it to you.
Exempt from VAT
When you are a dance teacher and teach, for example, jazz, children style dancing, hip hop, salsa or classic ballet, it is important that you know the age of your students for the VAT declaration. Are they older than 21 years old? Then you are obligated to charge 21% VAT and paid that amount with your tax assessment to the Tax Authorities
To make it ‘easier’ for dance teachers, there are a number of exceptions to the abovementioned rule. For example, aerobics is taxed with 21% for all ages and for workshops and shows you can charge the lower VAT rate of 9%. The lowered rate applies to goods and services that the government wants to support or stimulate. Activities that improve knowledge or health (for example, workshops or providing a sport event) often fall under the lowered rate or are exempt. However, with recreational activities the higher rate applies.
When does the 9% VAT rate apply on dancing classes?
As a dance teacher, you are often in a gray area in regard to your VAT payments. For example, you invoice adult salsa classes with 21% (because it is considered recreational) while the same group can be invoiced with the low rate of 9% if it was a Zumba class (because it is considered sport). When it is not entirely clear as a dance teacher or professional dancer whether you should charge VAT, and if so how much, then we would advise you to check* this with the Tax Authorities. When you need help with your entire financial administration or need fiscal support for other reasons. We at Lexlupa can help you
The general rule for VAT payments in regard to dance classes for self-employed professionals is simple: you do not charge VAT for students under 21 years old. Students that are above 21 years old, you do charge VAT to. The reference date for the age limit is at the start of the course. When the student turns 21 years old, during the course, the exemption continues. However, when the course is longer than a year, the exemption stops after a full year. You can then choose to divide the course in class periods of a maximum of one year.
When you offer your services as a dance teacher without VAT, make sure you take into account that you cannot reclaim the VAT on your expenses with the Tax Authorities. When you are partially exempt and partially pay taxes, then a calculation of the pretax pro rata is applied. For example, when you charge VAT over 30% of your income, you can only reclaim up to 30% of the VAT as pretax. When you work with different VAT rates, your declaration becomes more complicated. Ask for advice where necessary to prevent you miss out on any deductions or use the wrong rates.