Many companies are looking for new markets. An attractive country to set up or expand a business may be the Netherlands. It is a modern, rich country with an interesting history and culture. The Netherlands is part of the European Union and its tax system is considered favourable for new entrepreneurs. These aspects further encourage investment in the country. It is worth taking a closer look at how taxes are settled in the Netherlands with a particular focus on VAT.
BSN, or citizen service number
In the Netherlands, a BSN number called a citizen service number is used to process personal data. It is required for a number of activities in this country, among others, for company registration. Only after obtaining it is it possible to obtain a VAT identification number. Registration is compulsory for all who carry out VAT-taxable business activities in the Netherlands.
Several company tax numbers
When you register a company in the Netherlands, you receive a KVK or HR number, which serves as proof of business registration. Partnerships and legal entities receive an RSIN number, which is equivalent to a citizenship service number. The VAT number in Netherlands is referred to by the symbol BTW. The Tax and Customs Administration, which operates under the supervision of the Ministry of Finance, is responsible for registration.
The VAT number in Netherlands consists of the country code, NL, as well as nine digits ending with the letter B and two check digits. Sole proprietorships and partnerships are also issued with a second VAT number with the symbol BTW-ID, which is used when dealing with customers and suppliers.
Various VAT rates in the Netherlands
The standard rate of VAT in the Netherlands is 21%. In addition, there is a reduced rate of 9% and a 0% rate. The 9% VAT rate applies to products such as food, medicines, books and magazines. The zero rate is mainly used for transactions related to the international transport of goods or persons. In the Netherlands, certain goods are also exempt from VAT, for example, those related to healthcare, education and banking services. If you are interested in doing business in the Netherlands, you should consult a detailed list of items to which specific tax rates or exemptions apply.
Registration of a company for VAT purposes
The standard time for obtaining a VAT number in Netherlands is up to two weeks. The registration of a company for VAT, using the appropriate form, should be addressed to the Tax and Customs Administration – Department of International Issues. All VAT matters are dealt with at this office, exception for entrepreneurs who have appointed a tax representative. Through this office, VAT returns, declarations for Intra-EU transactions and the reverse-charge mechanism can be submitted. In this case, activities must be performed through the tax office assigned to the representative.
Submission of VAT returns
VAT returns in the Netherlands must be submitted on a monthly, quarterly or annual basis. Quarterly returns are the most common, which can be changed if necessary. To do so, you must send a letter to the Tax and Customs Administration. This is also the place where you can obtain information on the required frequency of sending the forms and other matters relating to VAT settlements.
Cooperation with a specialized tax office
As in any country, tax regulations in the Netherlands are subject to change. For this reason, many entrepreneurs choose to work with a professional tax office such as INTERTAX. You can also find more information on the current legislation at: https://polishtax.com/vat-number-in-netherlands/. In this way, sole traders do not have to deal with the current state of the law, but can buy into developing their business without fear of penalties or other inconveniences from the Dutch tax authorities.
