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Netherlands VAT (BTW) Guide - Rates, Registration, Returns

Netherlands VAT

The Netherlands applies a value-added tax system, locally called BTW (Belasting Toegevoegde Waarde). It’s a tax charged at different stages of buying and selling goods or services. Whether you're running a shop in Amsterdam or a digital business serving customers across Europe, understanding how VAT works is essential to stay compliant.

💰 VAT Rates in the Netherlands

As of 2025, the Netherlands uses three different VAT rates:
  • 🔵 21% Standard Rate – This is the general rate applied to most products and services such as electronics, clothing, and furniture.
  • 🟢 9% Reduced Rate – This applies to food items, medicines, books, and local transport.
  • ⚪ 0% Zero Rate – Used mainly for exports outside the EU and certain international services.

🏷️ Who Needs to Register for VAT?

You must register for VAT (BTW) in the Netherlands if:
  • You're selling goods or services regularly.
  • Your annual sales exceed the small business limit (usually around €20,000).
  • You're trading across EU borders, either buying or selling.
Once registered, you’ll receive a Dutch VAT number, which must be shown on all your invoices and used while filing returns.

🧾 Invoices and VAT Compliance

Dutch law requires businesses to issue proper invoices when VAT is involved. Each invoice should clearly show:
  • Business name and address
  • VAT number
  • Customer details
  • Date and invoice number
  • Product/service description
  • Taxable amount and VAT charged
  • Total amount including VAT
Make sure to keep all invoices safely for at least 7 years.

🔁 VAT Returns - Filing and Payment

Depending on your business size, you may need to file VAT returns every month, every quarter, or once a year. You report the VAT collected from customers and deduct the VAT you paid on business purchases. The difference is what you either pay or claim as a refund.
Returns are filed online using the Belastingdienst portal - the official Dutch tax website.

🛍️ Selling Across the EU and OSS Scheme

If you sell to customers in other EU countries, you can simplify VAT compliance using the One-Stop Shop (OSS) system. This allows you to handle VAT across the EU without registering in every country you sell to.
For businesses exporting outside the EU, a 0% VAT rate applies - but make sure you have proof of shipment.

🚫 What is VAT-Exempt?

Not everything is taxed. Some services are VAT-exempt in the Netherlands, including:
  • Education
  • Healthcare
  • Insurance and financial services
  • Certain cultural or charitable activities
If your business only offers exempt services, you may not need to register for VAT.

🧮 Quick Example

If you sell a product for €200 and it falls under the 21% VAT category:
  • VAT = €200 × 21% = €42
  • Customer pays €242
  • You submit €42 to the tax office
This way, your selling price includes the tax, and your records stay clean.

💡 Pro Tips for New Businesses

  • Always double-check the correct VAT rate for your product or service.
  • Use software tools or calculators (like GSTCal.org) to simplify the math.
  • File returns on time to avoid penalties.
  • Keep your books organized - Dutch tax authorities do audit checks.
Understanding VAT in the Netherlands isn’t complicated if you follow the rules from the start. Whether you sell physical goods, offer services, or run an online store, registering on time and applying the right VAT rate will keep your business safe and growing. Stay updated with tax changes and file your returns regularly.