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What is the difference between a VAT exemption and a VAT rate of 0%?


What is the difference between an exemption and a rate of 0%?

If goods or services are exempted from VAT, the VAT on the expenses made to produce these goods or services can't be claimed back. If the goods or services are taxed with 0%, the VAT on the related expenses may be claimed back though. The same is applicable if you export your goods to another country. The goods may leave the Netherlands without VAT, but you can claim back the VAT on your expenses, which is beneficial for your liquidity.
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Comments (2)
Comment by Designer on Thu, Jun 2nd, 2016 at 9:24 PM
Hallo: I am a graphic designer. I provide services from the Netherlands to another EU countries. My foreigner clients and my fellow designers here told me that the invoices for our work are VAT exempted. How can I find the law or the legal text that allow this exemption in case that the Tax autorithies ask me? Thanks!
Comment by Arjan Enneman on Wed, Aug 10th, 2016 at 6:44 PM
The services you provide to business clients in other EU countries indeed remain VAT free. Your clients will have to declare the VAT themselves in their own country. This is called the reverse charge procedure. You will have to mention on the invoice that the VAT is reverse charged. Also check that your client has a valid VAT number of their country. For more info see for example
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