In that case, you state ‘0% VAT’ as standard on the invoice. You can deduct the sales tax that you pay on the expenses as input tax. The reason behind this 0% rule is that the consumer has to pay VAT on these goods and services abroad. 

The same applies to goods and services that an entrepreneur imports into the Netherlands. No VAT is charged on this in the country of origin. Consumers in the Netherlands pay VAT.

VAT exemption

The 0% rate is not the same as an exemption from VAT obligations. The same may apply to accredited childcare, people in education, funeral directors or freelance copywriters who make strictly substantive contributions to a magazine, website or other medium. A complete overview can be found at the tax authorities. 

Please note: it is always up to the tax authorities to determine whether or not you have to pay VAT.

Exemption from VAT on your invoice

If you are exempt from VAT, please know that you cannot charge VAT on invoices for customers or clients. You then state on the invoice that an exemption applies.

Are you dealing with both exempt and taxed turnover? Then you have to split up these sources of income in your business administration. For some professions you have to deal with different rates. While you are wondering how to calculate sales tax you should be aware of these matters.

Journalists and btw

Journalists, for example, may be eligible for an exemption for regular work, but for commercial work they should charge the rate of 21%.

If they work for a foreign client, the 0% rate must be applied.

Have you found a new customer and has the nature of the assignment been determined? Then it is wise to first check with the tax authorities what applies to your situation.

Small business scheme (KOR)

As a small entrepreneur you can get a tax benefit if you qualify for the small business scheme (KOR). This tax reduction on the VAT to be paid by you applies if – after deduction of the input tax – you have to pay less than € 1,883 VAT in a year.

Please note: the ‘old’ KOR is valid up to and including 2019. From 2020 new rules regarding the KOR will take effect. Read here what the new KOR entails. 

Exemption from administrative obligations

If you already use the KOR before 2020, you will no longer be automatically entitled to a VAT exemption or reduction from next year. To still be able to use the benefits, you must register your company for the new KOR. The waivers of administrative obligations (exempted) are automatically converted and have now been notified by letter by the tax authorities.