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

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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. So a VAT rate of 0% can be more beneficial then a VAT exemption, if you manage the VAT obligations around maintaining an administration and filing of VAT returns.

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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