Most goods imported into the Netherlands from outside the EU are subject to VAT. The VAT will have to be paid by the importer at the time of clearing goods into the EU. Where the importation is for business purposes, then the importer may be able to reclaim the tax (subject to certain rules). However, in The Netherlands it is possible to postpone payment of import VAT to the periodic VAT return, hence no cash-flow occurs (referred to as an “import VAT deferment” or “the reverse charge VAT on import”).
Import VAT deferral
The import VAT deferral means obtaining a cash flow advantage when importing goods by reporting payable and deductible import VAT on the VAT return rather than paying import VAT on the border when goods are cleared into free circulation in the EU and deducting this VAT on the VAT return later.
A taxable person not established in the Netherlands (a ‘non-resident’) will not be able to shift the import VAT to the VAT return unless it appoints a fiscal representative.
In certain conditions, a fiscal representative is obligatory. For example, if a non-EU business effects EU distance sales in the Netherlands, then appointing a general fiscal representative is required.
How can a non-Dutch business defer import VAT?
Appointing a fiscal representative is required if a non-Dutch business wants to apply the reverse charge VAT on import (i.e. to obtain an import VAT deferral (article 23) license). Please see more details in ‘Take advantage of deferring import VAT in the Netherlands’.
Importers of Low-Value Goods into the EU can make use of IOSS—Simplified Reporting and Payment of VAT
As of July 1, 2021, all imports are subject to VAT unless the IOSS is used. The IOSS is a special scheme for reporting sales of low-value goods (consignments not exceeding 150 euros) imported from outside the EU. Under the IOSS, the importation is VAT exempt and the importer charges VAT at the point of sale to the customer and declares and pays this VAT via a monthly IOSS return.
The IOSS allows for a quick release of imported goods (“green channel” fast customs clearance) and also for a release of goods destined for customers located in other EU MSs than that of the entry of the goods in the EU.
Only low-value goods covered by IOSS can be released into free circulation in the EU Member State (MS) other than the EU MS of final destination of those goods.
Special rules for B2C supplies
Dutch local sales
When a non-Dutch business sells goods to private individuals located in the Netherlands from the stock located in the Netherlands, then:
- the supplier becomes liable to register for VAT in the Netherlands;
- the Netherlands becomes the place of supply; and
- Dutch VAT should be charged on the sales.
EU distance sales
Special requirements apply to businesses involved with so-called distance sales made within the EU, e.g. mail order and internet sales.
Registration for VAT in the Netherlands may be required where a non-established business is involved with distance selling via the Netherlands.
Distance selling occurs when a taxable supplier supplies and delivers goods from one EU MS to a customer in another EU MS who is not registered or liable to be registered for VAT. Such customers are known as non-taxable persons, and include private individuals and businesses and other organizations that are not registered for VAT (either because of their size, or the fact that they are exempt from having to register due to the nature of their activities). The common examples of distance sales are goods supplied by mail order and via the internet.
From 1 July 2021, the country-by-country thresholds of either €35,000 or €100,000 set by each EU MS for distance selling within EU have been replaced with a single pan-EU threshold of €10,000. This threshold applies to the total cross-border sales by the business across the EU (and NI) and not, as previously, on a country-by-country basis. No threshold applies for businesses who are not established in the EU or the Northern Ireland (NI) who have to register immediately when performing distance sales within the EU.
This means that when an EU/NI business (who has cross-border pan-European sales above the threshold of €10,000) or a non-EU businesses (no threshold applies) sells goods to the non-VAT registered customers located in the EU via the Netherlands (e.g. from a stock located in the Netherlands), then the supplier becomes liable to register for VAT in all EU MSs where it has customers.
OSS registration possible
Alternatively, the business could opt for online One Stop Shop (OSS). To ease the administrative burden of businesses having to register in each EU member state where they have customers, there is a new opt-in online One Stop Shop (OSS) quarterly VAT reporting and payment system. This means that businesses falling in scope of the new distance selling rules in effect from 1 July 2021 are not required to VAT register in each of the EU MS of their customers if they opt for OSS.
However, the OSS cannot be used to report local sales or intra-Community stock transfers for which local Dutch VAT registration is still required. Any sales to customers in the Netherlands are subject to Dutch VAT and should be reported in the Dutch VAT return.