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Low VAT rate in the Netherlands increases as per 1 January 2019

On 1 January 2019, the low VAT increases in the Netherlands from 6% to 9%. This means that companies supplying goods or providing services will need to adjust their administrative and invoicing systems.

Insofar you have outsourced your financial administrative processing to Interfisc Consult, we are taking the lead in this respect. Do you make your own arrangements? Then you are welcome to use the explanation below, which is based on the official website of the Dutch Tax Authorities: www.belastingdienst.nl

On which items is the low rate applicable?

The low rate is applied to various goods and services, including:

  • Foodstuffs, agricultural goods, medicine and medical aids, and books or periodicals
  • Repair of bicycles, shoes, clothing
  • Hairdressers
  • Work done on housing
  • Culture and Recreation
  • Sports
  • Passenger transport

Who is affected by this change?

Everyone who buys something in the Netherlands will be confronted with an increase in the prices of various goods and services.
Additionally, companies supplying goods or providing services in the Netherlands that are subject to the low rate must ensure to adjust their administrative and invoicing system accordingly in due time!

Which VAT rate should you apply and when?

The date on which the VAT becomes due determines which VAT rate is applicable. Please find below a further explanation of the date on which VAT becomes due. The date on which VAT is due depends on the system applied in your VAT accounting system.

In the Netherlands, this concerns the cash system or the invoicing system:

They charge VAT based on the cash and bank accounts. You are due payment of VAT if you have received income. For example in your bank account or in your cash register.
Do you apply the cash system? Then you must apply the 6% VAT rate on all sales received in 2018. You must apply the 9% VAT rate on all sales received in 2019.

Or to legal entities that are not a business, such as associations or foundations.
Do you apply the invoicing system? Then the date on which you send the invoice or should have sent the invoice (before the 15th day following the month during which the performance was delivered) determines the VAT rate to be applied: the lower VAT rate for 2018 (6%) or the higher VAT rate for 2019 (9%).

Example
On 28 December 2018, you delivered goods to another business. You send the invoice on 5 January 2019. This date determines the VAT rate. In this case, the 2019 VAT rate (9%).

Please note: In some cases, adjusted rules apply for determining the VAT rate to be applied.

If the cash system cannot be applied, and you do not need to send an invoice for delivering goods or providing a service, then the time you complete the performance determines the VAT rate. For example, to deliver goods or provide a service to a private consumer, you do not need to send an invoice.
Do you apply the invoicing system and do you sell to a private consumer? Then you can apply the 6% VAT rate if you complete delivery or service provision in 2018. If you complete the delivery or service provision in 2019, the 9% VAT rate applies.

Example
You deliver goods to a private consumer on 28 December 2018. You send the invoice to the consumer on 5 January 2019. The moment of the delivery is leading, so the 6% VAT rate that applies to 2018 should be applied.

If you receive an advance payment, you should a apply the VAT rate of that date.

Example
On 28 December 2018, you receive an advance payment for goods to be delivered on 5 January 2019. In that case, the 6% VAT rate of 2018 applies.

Are you still unsure what rate to apply?

You can contact one of the advisors at Interfisc Consult BV via consult@interfisc.eu or call direct on +31 70 313 3080.

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Since 1972, Interfisc has offered international HR & Payroll solutions in the Netherlands, Belgium, Germany, France, the United Kingdom, and Italy. We do this from our offices in the Netherlands and Belgium, and with an international team of around 45 committed and caring employees. 

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