All About Dutch VAT numbers
Is your business operating in the Netherlands or you have a branch of a foreign company located in the Netherlands, or your enterprise is located outside but you carry business in the Netherlands? In all cases you will have to pay turnover tax (also known as value added tax, VAT) in the Netherlands.
To do this, you will need a VAT identification number. The VAT number is also compulsory if you are planning to store goods or cargoes within the territory of the Netherlands. Even if you are a non-resident trader, shipments inside the EU are taxed in the Netherlands. So you can be required to have a Dutch VAT number in different situations.
When you operate your business, either as a trader, seller, or service provider, you are required to add your VAT ID number to your invoices. In case you sell products or provide services via internet, you should clearly state your VAT ID number on your website.
It is also compulsory for European companies to add the VAT ID number of their clients from the Netherlands on the invoices, and also in their statements of supply of either goods or services.
What is a VAT number and when to use it?
In order to contact the Tax and Customs Administration, you should use your VAT number, which, for sole traders, were arranged differently as per 1 January 2020. VAT ID number are no longer based on BSN numbers (Citizen Service Numbers). This is made in order to better protect your privacy.
You use the VAT number for VAT returns, when claiming non-recover VAT and in order to reverse or change your VAT. Your VAT number is composed by your business’ RSIN/fiscal number or BSN number, 3 additional positions (B01 up to B99) and the letter B, for example: 111223344B05. The first ever VAT number issued to your business ends with B01.
A VAT number requires a permanent establishment
A VAT ID number is a number you are assigned as sole proprietor and self-employed person by the Tax and Customs Administration office of the Netherlands, once they consider that you are effectively an entrepreneur for VAT purposes. This can be at registration with the trade register or as per your written request to the local VAT office.
To have a right for a VAT number, you shall not only sell services or goods. Also, your business shall have a permanent establishment in the Netherlands. A permanent establishment is a business place with an address in the Netherlands with sufficient facilities for operating an independent enterprise. Having a director or employee working from the Netherlands is considered to be an important element of this.
In case your are opening a Dutch company the tax authorities use the SBI code your business is registered with to assess if you will have VAT activities. A VAT questionnaire can be sent to assess if your business has a permanent establishment. If this is the case, the VAT number will be issued promptly.
When there is no Dutch permanent establishment you can request a VAT number as a foreign entrepreneur. Such VAT number gives limitations in respect of export out of the EU or entitlement for an article 23 license.
How do I apply for a Dutch VAT number?
First, if you start a business in the Netherlands, you will need to be registered in the trade register of the Chamber of Commerce of the Netherlands (KVK). Once you are registered at the KVK, they will send your data to the Tax and Customs Administration of the Netherlands, which will assess if you can be considered as an entrepreneur for VAT purposes, and then they will provide you a VAT number.
If you register yourself as a sole proprietor at the Commercial Register of the Netherlands Chamber of Commerce, then you will receive two separate documents by post from the KVK. One states your VAT number and the other one your VAT ID number. There are two numbers issued to keep your VAT number, which is based on the BSN, private.
In case that your business is located outside of the Netherlands and you supply goods or provide services to business located inside the Netherlands, you will need to register with the Dutch Tax and Customs Administration office.
If you want to receive a VAT number for a foundation, that is only possible if meets the set criteria for entrepreneurship, the Tax and Customs Administration will evaluate if you qualify for it, and if you do so, then you will receive a letter from the Tax and Customs Administration with your VAT number.
Filing of Dutch VAT returns
As an entrepreneur, when you want to file a VAT return, you will need to have a VAT number. The filing is mostly done every three months also in case there is no VAT payable or reclaimable.
The return has to be filed during the month aft
er closing of each quarter. In case you have to pay more than 15,000 euro in VAT per quarter, you will be required to do the VAT return monthly. After a first filing of more than 15,000 euro, your business will receive a notification letter from the tax authorities for switching to monthly filings.
For the first VAT filings the authorities most often send a paper form. The filings thereafter shall be done by software or via the site of the tax authorities using an EH3 authentication certificate.
Sometimes it may happen that, after you have delivered a product or provided a service, your client does not pay the invoice, or does pay it but partially. If this is the case and you have already added that invoice to your VAT return form, you can claim a recover of the VAT amount of the product or service that has not been paid one year after the payment deadline expired.
In case you do not have knowledge about accounting, your company’s invoicing is complex or have no EH3 recognition certificate, then you can decide to file your VAT return externally. Most professional advisors will be able to help. Larger companies with international invoicing often use VAT specialists. You should consider the price, quality and service you want to hire.
Contact ABiLiTieS for assistance with preparing and filing VAT returns.