VAT rate in the Netherlands set to increase on 1 October 2012 - from 19% to 21%
Article ID: 236 | Last Updated: Wed, Jun 13, 2012 at 11:24 AM
The Dutch VAT rate is set to increase from 19% to 21% on 1 October 2012. Reason for this increase is the current economic situation and the EU requirement to have a deficit below 3% of the GDP. The Dutch government just needs more money and increasing the VAT rate is an easy way to generate more income. Instead of cutting costs, tax is increased.
The increase also seems strange since in 2008 the announced increase of the highest VAT rate with 1% from 19% to 20% was cancelled due to the financial crisis. The same crisis now turns out to be the reason why the VAT rate is increased with 2%. Negative effect of the higher VAT rate will of course be a lower spending power of the households which will affect the VAT which will be received by the Dutch government.
The lower VAT rate of 6% will stay the same.
If you have a business the change of the VAT rate will of course have consequences for your administration. Guideline is that if services are provided or goods are delivered before 1 October 2012, the current VAT rate is applicable (even if the invoice is sent after 1 October 2012). This may be a reason to convince your client to hire your services or buy your product before 1 October 2012.