Knowledge Base

Welcome to the Expatax Knowledge Base containing hundreds of answers to questions we received about topics concerning tax, payroll, accounting, legal, business etc. related to the Netherlands. Search in our Knowledge Base or browse the different categories. Expatax is a Dutch tax and accounting firm specialized in assisting international workers, freelancers and companies. Don't hesitate to contact us if you need assistance or check our website.

VAT rate in the Netherlands set to increase on 1 October 2012 - from 19% to 21%

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.
Attached Files
There are no attachments for this article.
Comments (4)
Comment by donnie on Fri, Sep 28th, 2012 at 11:13 PM
this is so rediculous!!. on one hand there are job cuts and on the other hand there is increase in tax. its the people who are suffereing from job cuts and then on top of it the residents have to pay 2% increased tax. but there cost cutting of the goverment is not done. cost cutting to maintain the royal family is not possible. cost cutting for lavish goverment organization is not possible.what is possible is to put more burden on the residents and get money from them. i wonder why the dutch people don‘t protest it, its going to affect them severally in the long run. strange society!!!
Comment by arjan enneman on Thu, Oct 18th, 2012 at 1:57 PM
idea behind the vat increase is that it will affect everybody. this way the costs of the crisis are paid by all residents. plus it is easier to push true. any changes in the income tax will only affect certain groups of people in which case people will protest that they are discriminated. there is a deficit that must be covered, one way or the other, and the government has decided that vat increase would be the best option instead of raising income tax or cut on deductions. raising income tax (i.e.) wage tax would make employees more expensive which would lead to even more job cuts. and the government is reducing costs, also in their own organisation where people lose their jobs. well, every country makes its own decisions.
Comment by carrie ballard on Fri, Nov 23rd, 2012 at 5:04 PM
this may not be exactly on topic, but i just purchased something and the price has gone up 6% not 2%. are you finding this? is there a place where complaints can be registered? (i suspect the merchant of jacking up prices because of the rise in vat).
Comment by arjan enneman on Thu, Dec 6th, 2012 at 9:41 AM
if your question concerns the total price of the product or service then there is nothing you can do. the business can make up its own fees. so if the vat is raised with 2% then they can still decide to raise the total price with 6%. this may have other reasons like inflation etc. you can of course complain but as long as there is no contract which states that a certain fee is applicable for a certain period, there is nothing you can do. the vat raise itself can always be charged, standard rule in the vat law. if your question concerns the vat rate itself then there is something you can do. the vat rate is either 0%, 6% or 21%. there is no other vat rate. so if a business charged you a different amount something may indeed be wrong. if so, you should not accept the invoice. a wrong invoice will have the consequence that the vat amount will not be deductible for you (if you have a business too). that would mean double trouble. you pay too much and you can‘t claim anything back from the tax authorities. you can complain to the business which sent you the invoice. ask them for the reason why a different rate was used.
Security Code Security Code
Related Articles RSS Feed
My business is not VAT registered. Can I still reclaim VAT we have paid for goods/services?
Viewed 9711 times since Tue, Nov 29, 2011
What is the difference between a VAT exemption and a VAT rate of 0%?
Viewed 15244 times since Tue, Dec 13, 2011
Can I claim back all VAT on my expenses as a business owner?
Viewed 12922 times since Tue, Dec 13, 2011
What is VAT?
Viewed 13520 times since Sun, Feb 24, 2013
What is the VAT rate in the Netherlands for men‘s shirts?
Viewed 4491 times since Thu, Mar 29, 2012
Certain business costs can’t be deducted at once but have to be depreciated over time. Accounting records are important.
Viewed 8714 times since Tue, Dec 20, 2011
What is important for the VAT declaration? Date of service provided, date of invoice or date of payment?
Viewed 1241 times since Wed, Jan 21, 2015
The tax authorities do not want to register my business for VAT.
Viewed 2597 times since Thu, Dec 1, 2011
Vat exemptions - funeral cases
Viewed 14537 times since Thu, Sep 6, 2012
How are VAT returns filed?
Viewed 12045 times since Tue, Nov 29, 2011