For non-EU companies eyeing business growth in the Netherlands figuring out the maze of international trade rules those about customs and import taxes, can be pretty overwhelming. If you're trying to make a splash in the Dutch market, getting a VAT refund in the Netherlands can take the edge off the costs that come with it. You've got to get the hang of the Dutch VAT system, sign up for VAT, and make smart use of the reverse charge rule, among other savvy financial moves. It's not just about playing by the rules; it's about making sure your business stays fit under the VAT Act so that your Dutch adventures don't just look good on paper but also make good money.
Starting your journey to get back import VAT in the Netherlands means you first need to know the rules for getting a VAT refund, learn how to file VAT returns the right way, and use import papers the way they should be used. In this article, we're going to walk you through getting your VAT refund. This includes why you need an Article 23 permit how to work with customs by having an EORI number in the Netherlands, and making sure you meet VAT deadlines. We'll also point out how to avoid common mistakes when asking for a VAT refund, like getting confused about goods that don't need VAT or the importing steps under the IOSS system. Plus, we'll explain the job of a fiscal representative and what you need to do to get an EU VAT refund, so if you're a business outside the EU, you'll have the know-how to deal with Dutch taxes like a pro.
Understanding VAT on Imports in the Netherlands
When you import goods to the Netherlands from countries outside the EU, you need to tell Customs. This action mandates the payment of VAT for these imported items. The VAT level is the same as it is for goods and services within the country maintaining even treatment for all sales. , import duty and VAT need paying when the items first arrive in the EU. The customs value of the products includes the price of the items, plus transportation, insurance, and any other costs until they reach the EU border.
How is VAT Applied to Imports?
For businesses importing goods, such as purchasing items from China and transporting them to the Netherlands, the process involves declaring these goods under the importer's name and paying Dutch VAT based on the customs value. This value encompasses the price of the goods along with associated costs like shipping and insurance up to the EU's external border. It is crucial for non-EU businesses to understand that they cannot apply the reverse-charge mechanism on these imports. Instead, they may opt to use a tax representative who can apply the reverse-charge mechanism on their behalf, potentially alleviating the immediate financial burden of VAT payments at customs.
How to Apply for an EORi Number in the Netherlands, and Why?
An EORI (Economic Operators Registration and Identification) number is mandatory for all Dutch companies engaged in trading activities within the EU. This unique identifier is essential for smooth customs operations and is required for both importing and exporting goods. To obtain an EORI number, Dutch companies can either use their existing tax reference number or apply through a standard application process. The EORI number not only facilitates the tracking of trading activities by customs authorities but also simplifies the process of customs declarations and clearances.
For companies not already assigned an EORi number, the application involves submitting a form through the Dutch tax authority's website or seeking assistance from service providers who can expedite the process. This number is crucial for international trade, especially when dealing with customs declarations in foreign countries, as it ensures faster and more efficient processing of goods through customs.
In summary, understanding and managing VAT on imports and securing an EORI number are fundamental steps for non-EU businesses aiming to operate successfully in the Netherlands. These processes ensure compliance with EU regulations and facilitate smoother trade operations within the region.
Eligibility Criteria for VAT Refunds
To be eligible for a VAT refund in the Netherlands, non-EU businesses must meet specific criteria that ensure they do not engage in regular economic activities within the EU. These criteria are designed to prevent businesses that have a permanent establishment or make frequent supplies within the EU from claiming refunds, thus maintaining the integrity of the VAT system.
Non-EU Business Requirements
A non-EU business can qualify for a VAT refund if, during the refund period, the business:
Was not based in any EU Member State.
Did not supply goods or services in the EU Member State from which they are claiming the VAT refund, except for:
Exempted transport and ancillary services as specified under Articles 144, 146, 148, 149, 151, 153, 159, or 160 of the VAT Directive.
Supplies to customers liable for payment of the related VAT under the reverse-charge mechanism, according to Articles 194, 196, or 199 of the VAT Directive.
These conditions ensure that the refund is only available to those businesses genuinely outside the EU fiscal territory and not engaged in taxable supplies within the EU, except under specific exempt circumstances.
Necessary Documentation
To successfully claim a VAT refund, non-EU businesses must provide comprehensive documentation, including:
Proof that the business is established outside the EU.
Invoices and import documents showing VAT paid in the Netherlands.
Evidence that the business does not have to file a VAT return in the Netherlands.
Additionally, businesses must adhere to the minimum amount thresholds for refund requests:
€400 for a request covering at least three months but less than a calendar year.
€50 for a request covering an entire calendar year or the last part of it.
Requests must be submitted before October 1 of the year following the year for which the VAT refund is requested. For instance, for VAT paid in 2022, the refund request must be submitted by October 1, 2023. Businesses need to ensure that they have the necessary login details for submitting VAT refund requests, which can be acquired through the Dutch Tax and Customs Administration's online tools. Alternatively you can appoint House of Companies as your local representative and submit the VAT refund request via e-herkenning.
By meeting these criteria and providing the required documentation, non-EU businesses can navigate the VAT refund process effectively, ensuring compliance and optimizing their fiscal operations in the Netherlands.
Steps to Secure a VAT Refund
To secure a VAT refund in the Netherlands, non-EU businesses must navigate a series of administrative steps. These steps ensure compliance with Dutch tax laws and facilitate the successful reclaiming of VAT on business-related imports.
Register for VAT as a Foreign Entrepreneur with help of House of Companies
Foreign companies operating in the Netherlands without a VAT representative need to directly engage with the Tax and Customs Department of International Issues. Initially, the business owner should complete a special form for the registration of foreign business aid, which includes a questionnaire to assess immediate eligibility or if additional registrations, such as a VAT number, are necessary. House of Companies can assist in streamlining this process, ensuring that all requirements are met efficiently.
Submitting the VAT Return (Tax office Heerlen, or e-herkenning)
Once registered, detailed records of all transactions must be maintained. This includes keeping all purchase invoices and proof of VAT paid. These documents are crucial when submitting the VAT return through the Dutch Tax Administration’s online portal, which can be accessed via e-herkenning or directly at the Tax office in Heerlen. It’s essential to ensure that all paperwork is meticulously prepared to avoid any discrepancies that could delay the refund process.
How long does it take to get your first VAT refund after your first import and VAT return?
After the first VAT return is submitted, the refund process typically commences. Refunds are usually repaid automatically into the business’s foreign bank account, provided the Dutch tax authorities have all required IBAN details. The initial repayment may prompt a request from the authorities to complete further details to facilitate future transactions. Businesses should follow up with the tax authorities to avoid delays. It's also possible to request that the VAT credit be carried forward and offset against future VAT payments, which can be beneficial for continuous import activities.
By adhering to these steps and utilizing the services offered by entities like House of Companies, non-EU businesses can effectively manage their VAT obligations in the Netherlands, ensuring that they maximize their potential VAT refunds while remaining compliant with local regulations.
Key Deadlines and Timelines
Important Submission Dates
For non-EU businesses operating in the Netherlands, it is crucial to adhere to the following VAT return and payment deadlines to ensure compliance and avoid penalties:
Quarterly Returns: The last day of the month following the quarter end is the deadline for both filing and payment. Specifically, the deadlines are 31 January for the 4th quarter, 30 April for the 1st quarter, 31 July for the 2nd quarter, and 31 October for the 3rd quarter.
Annual Returns: The deadline for the annual VAT return and corresponding payment is 31 March of the following year.
Monthly Filings: If applicable, the final day of the month is the deadline for filing and paying VAT for the previous month.
Businesses must ensure that even if no VAT has been collected or paid during a period, a zero return must still be filed to remain compliant.
Processing Times
Once the VAT return is filed, the Dutch Tax Administration processes refunds promptly. Typically, VAT refunds are issued automatically to the foreign bank account on record. However, for the initial refund, the tax authorities might request additional details to verify the account, which can delay the process. It is advisable for businesses to promptly respond to any queries from the tax authorities to expedite their refunds.
Interest on VAT Paid or Charged by Belastingdienst.nl
Interest charges apply under certain conditions:
Interest on Late Payment: If VAT payments are delayed, interest is accrued from the day following the due date until the payment is credited to the Tax Administration's account. This interest is not a penalty but compensates for the time value of money.
Receiving Interest: Conversely, if the Tax Administration delays a refund beyond six weeks, they will pay interest to the business. This ensures fairness and accountability from both sides.
Businesses can object to the amount of interest charged by submitting a detailed letter to the Tax Administration, outlining the reasons for the objection and providing necessary documentation to support their claims.
By understanding these key deadlines and processing guidelines, businesses can better manage their VAT obligations in the Netherlands, ensuring timely compliance and optimizing their financial operations.
How to Avoid Common Mistakes
Common Errors in VAT Refund Applications
When non-EU businesses attempt to secure a VAT refund in the Netherlands, several common pitfalls can hinder their success. First, the eligibility criteria are stringent; businesses must not be based in any EU Member State nor should they supply goods or services within the Member State from which they are claiming the VAT refund. This excludes specific exempted transport and ancillary services, or supplies to customers liable under the reverse-charge mechanism. Misunderstanding these criteria can lead to unsuccessful refund claims.
Furthermore, the accuracy of documentation is paramount. All invoices, vouchers, or receipts must include detailed information such as the supplier's VAT registration number, the cost of goods or services excluding VAT, and the VAT amount charged. For purchases over a certain value, additional details like the date of supply and an identifying number are necessary. Errors in these documents can lead to delays or denials of refund claims.
Best Practices
To streamline the VAT refund process and avoid common mistakes, businesses should adhere to several best practices. Firstly, maintaining meticulous records is crucial. This includes keeping original invoices and import documents, as copies are often not accepted. These documents should be readily available for electronic submission, and businesses must ensure that all information is correct and complete to avoid penalties for incorrect applications.
Secondly, businesses should start the VAT refund process immediately upon making their first eligible purchase. This proactive approach allows for timely gathering and submission of necessary documentation. Utilizing digital tools, such as the 'NL Customs VAT' app, can facilitate this process, especially at points of entry like Amsterdam Airport Schiphol where digital processes are in place.
Lastly, it's important for businesses to request tax-free shopping at the point of purchase and to ensure all refund forms are completed before departure. Keeping purchased goods in an easily accessible place for customs inspection, and ensuring all paperwork is in order for a smooth verification process at customs, are essential steps to secure a VAT refund without complications.
Resources and Further Assistance
For non-EU businesses seeking assistance with securing a Netherlands VAT refund on imports, a variety of resources and professional help are readily available to streamline the process and ensure compliance with local regulations.
Relevant Contacts and Web Resources
Non-EU businesses can access comprehensive information and support through the Dutch Tax and Customs Administration's official website. Here, they can find the necessary forms such as the 'Application for VAT refund for entrepreneurs based in non-EU countries.' It's crucial to submit these forms before specific deadlines to ensure timely processing of VAT refunds. For detailed queries, businesses can directly contact the Tax and Customs Administration, which provides guidance on VAT refund eligibility and the submission process.
Additionally, the House of Companies offers tailored assistance to non-EU businesses operating in the Netherlands. By contacting their local offices, businesses can receive expert advice and support throughout the VAT refund process. This personalized service ensures that all documentation, including import documents and invoices, is correctly prepared and submitted.
Seeking Professional Help
Engaging with a professional fiscal representative or a customs forwarding agent can significantly aid non-EU businesses in managing their VAT obligations in the Netherlands. These professionals ensure that all import documents are accurately handled and that the VAT paid on imports is correctly claimed back. They can also assist in registering the business as a foreign entrepreneur, which is a prerequisite for filing a VAT refund claim.
For businesses that have engaged a customs forwarding agent, it is important to note that the original import documents might not be returned. However, the VAT amount paid will be detailed on the invoice from the customs forwarding agent, and businesses can claim a refund of this amount, excluding the import duties.
Ready to claim your VAT back with House of Companies?
From understanding VAT on imports, eligibility criteria, and the detailed steps for VAT refund applications to adhering to key deadlines and avoiding common pitfalls, the guidance provided aims to equip businesses with the necessary knowledge to optimize their fiscal operations within the Netherlands.
For businesses looking to streamline their VAT filing process, House of Companies offers automated VAT filing services, incorporating this task seamlessly into their operational workflow.
Request a demo and manage your Dutch VAT affairs yourself at a fixed annual fee. By taking proactive steps towards comprehensive VAT management and leveraging professional support, businesses can not only ensure compliance but also enhance their financial efficiency in the dynamic marketplace of the Netherlands.
Important Rules and Regulations
Domestic vs. International Regulations
The Netherlands, adhering to the EU VAT Directive, allows for a standard VAT rate set by the Dutch government, provided it is above the EU's minimum of 15%. When dealing with international trade, especially imports, non-EU businesses must navigate these regulations closely.
The import VAT rate typically mirrors the domestic rate, currently at 21% or a reduced rate of 9% for specific goods. Non-EU companies can register as non-established entities and use a Dutch VAT number along with an EORI number to manage VAT obligations. Alternatively, employing a General or Limited Fiscal Representative can facilitate the use of an Article 23 license, which permits the deferral of VAT payments on imports.
Reverse Charge Mechanism
This mechanism shifts the responsibility of VAT payment from the seller to the buyer under certain conditions. For goods, if a non-established business supplies to a VAT-registered Dutch customer, the VAT is reverse-charged to the customer. This also applies to specific services, particularly those connected to immovable property, where the service is deemed to be supplied where the property is located.
Key examples include construction work, IT equipment sales exceeding EUR 10,000, and telecommunications services, where the reverse charge mechanism applies regardless of the supplier's or customer's VAT registration status. Additionally, for services following the general B2B rule, VAT is not charged by the non-resident business but is instead reverse-charged by the Dutch customer. This rule simplifies the VAT process but requires strict adherence to invoicing requirements, stating 'VAT reverse-charged' on relevant invoices to ensure compliance.
Handling Documentation
Handling the correct documentation is crucial for non-EU businesses seeking a VAT refund on imports in the Netherlands. This section outlines the necessary steps and best practices for submitting proof of import and tracking refund applications effectively.
Submitting Proof of Import
To initiate a VAT refund, businesses must first ensure that all import documentation is correctly prepared and submitted. The process begins at the point of purchase:
Invoice Requirement: Request an invoice in your name from the retailer or supplier immediately upon purchase. This invoice should explicitly mention the VAT amount.
Customs Validation: Before leaving the EU, present the invoice or a copy to Customs for validation. Customs officers will verify several details, including:
Your non-EU residency status.
Physical presence of the goods for inspection.
Personal export of the goods.
The invoice date, which should not exceed three months from the purchase month.
Digital Registration: For a smoother process, register the invoice digitally using the 'NL Customs VAT' app. This app allows for electronic validation at points like Schiphol Airport, where you can simply approach the customs desk with the app open, enabling Bluetooth and location services for digital validation.
Tracking Refund Applications
Once the documentation is validated, tracking the VAT refund application becomes the next critical step:
Submission of Signed Invoice: After customs validation, send the signed invoice back to the retailer, supplier, or your tax-refund intermediary. They are responsible for processing the VAT refund.
Use of Digital Tools: Leverage the 'NL Customs VAT' app to track your purchases and the status of your VAT refund applications. The app provides updates on whether you need to physically visit the customs desk or if the validation process can be completed digitally.
Monitoring Deadlines: Ensure that all refund requests are submitted before the statutory deadline, typically before October 1 of the year following the year in which VAT was paid. This is crucial to avoid missing out on eligible refunds due to procedural delays.
By handling and tracking the necessary import documentation, non-EU businesses can streamline the VAT refund process, ensuring compliance and timely reimbursement. These steps not only facilitate smoother operations but also mitigate the risk of errors that could impede the refund process.
Legal Requirements for Claiming VAT Refund
To claim a VAT refund in the Netherlands, non-EU businesses must adhere to specific legal requirements, ensuring compliance with Dutch tax regulations. This section outlines the criteria and documentation needed for successful VAT refund claims.
Criteria for Non-EU Businesses
Non-EU businesses are eligible for a VAT refund under certain conditions:
The business must be established outside the EU.
The business should not be required to file a VAT return in the Netherlands.
Dutch VAT must have been charged to the business.
The VAT should be deductible as input tax for the Dutch entrepreneur.
The minimum amount of VAT for which a refund is claimed must be at least €50 per calendar year or €400 per quarter.
Goods and services for which VAT is reverse-charged to the client or subject to a 0% tariff also qualify as taxed activities.
It is important to note that VAT charged on food and drink in catering establishments cannot be deducted. However, VAT on costs related to overnight accommodation can be deducted if these expenses are incurred in relation to taxed services.
Legal Documentation Required
The process of claiming a VAT refund requires meticulous documentation:
Proof of Business Status: Evidence that the business is established outside the EU.
VAT Payment Documentation: Invoices and import documents showing VAT paid in the Netherlands.
Non-requirement to File VAT Return: Confirmation that the business does not need to file a VAT return in the Netherlands.
Registration with Dutch Tax Authorities: Businesses must register with the Tax and Customs Administration’s Department of International Issues and receive a registration number for foreign entrepreneurs.
Businesses must submit their VAT refund claims within specific deadlines. For VAT paid during a calendar year, the claim must be submitted by October 1 of the following year. If the refund period covers at least three months but less than a calendar year, the minimum claim amount is €400.
VAT refund processing typically takes 2-3 months, provided all VAT obligations in the Netherlands are met. The Dutch administration may conduct a tax audit and request additional documents concerning the VAT credit reported. If any VAT credit is reported, it is refunded automatically to the previously communicated bank account during registration.
FAQs
1. How can non-EU businesses claim a VAT refund for imports in the Netherlands?To claim a VAT refund in the Netherlands, the total amount paid, including VAT, must be at least €50. Non-EU businesses can use the services of a tax refund intermediary to reclaim VAT. Retailers or suppliers from whom the goods are purchased can provide additional information on this process.
2. Are there VAT charges on goods imported into the Netherlands?Yes, VAT is charged on imports into the Netherlands based on the customs value, which includes the cost of the goods, transportation, insurance, and other related costs up to the EU's external border. Foreign entrepreneurs cannot use the reverse-charge mechanism for goods imported from non-EU countries.
3. How does one obtain a tax rebate in the Netherlands?To receive a tax rebate in the Netherlands, you must file an income tax return for the year in which the expenses were incurred. The Dutch tax office can refund certain qualifying expenses, and details on eligible types of expenses can be found on their official website.
4. What is the process for filing a VAT return in the Netherlands?VAT returns in the Netherlands can be filed online through the Mijn Belastingdienst Zakelijk portal on the Tax Administration's website. Legal entities must use eHerkenning to log in. Alternatively, VAT returns can be filed using software from commercial providers.
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