What VAT rate applies to your product or service? Rates of 21, 9 and 0% apply in the Netherlands. But beware: it is also possible that your activities are exempt from VAT. In this article you can read everything about VAT rates and exemptions.
Sales tax: what are the VAT rates?
As an entrepreneur subject to VAT, you have to take into account different rates that may apply to the goods and / or services supplied.
There may be three VAT rates apply to your business:
- General VAT rate: 21%
- Reduced VAT rate: 9%
- Zero rate: 0%
Calculate VAT? Use the VAT calculator
General VAT rate: 21%
This is the most common rate that applies to the vast majority of goods and services. In short, the 21% rate applies to all goods and services that are not exempt from sales tax and are not subject to the rate of 9% or 0%.
Temporary VAT reductions
Sometimes the cabinet takes a general decision to temporarily change a VAT rate. For example, when the construction sector suffered from the crisis, VAT on renovations was temporarily reduced from 21% to the reduced VAT rate of 6% applicable at the time (the low VAT rate of 6% was structurally increased in 2020 to 9%). The use of the sales tax calculator zip code is important there.
It was intended to encourage private individuals to have their homes renovated. This temporary amendment to the law not only benefited employment, but the entire industry was given a helping hand.
Reduced VAT rate: 9%
As described above, the 21% rate applies in most cases and the reduced 9% rate is an exception.
This is because there is a limited number of goods for which you can use the reduced rate of 9%. The 9% rate has only applied since January 2019. Previously, the low rate was 6%.
Examples 9% rate
This concerns, for example:
- Foods
- Medicines
- Tools
- Books
A number of services are also eligible for the reduced rate, such as a haircut at the hairdresser or if you want to offer camping facilities on your land.
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VAT rate for museums
Furthermore, the 9% rate applies to goods and services that the government wants to be accessible to everyone. Or of which the government wants to permanently stimulate the purchase.
This concerns, for example, basic necessities or goods or services with a cultural value, such as visiting a museum.
Zero rate: 0%
This rate applies to entrepreneurs who do business abroad and is particularly applicable to certain cross-border transactions. You can think of the export of goods to a country outside the European Union (EU).
You also have to deal with the 0% rate when you deliver goods to other entrepreneurs within the EU or if you provide services for export deliveries.