Netherlands

Value-added tax (VAT)

VAT, known in Dutch as the Belasting over de Toegevoegde Waarde or BTW, is payable on the supply of goods and services rendered in the Netherlands as well as on the importation of goods and on the ‘intra-European’ acquisition of goods. There are three VAT rates, which are 21%, 9%, and 0%.

The standard VAT rate is 21%.

The reduced 9% VAT rate is applicable on certain prime necessities, on certain energy-saving insulation activities on houses, and on certain e-publications.

The special 0% VAT rate is applicable mainly to intra-EU supplies, supplies of goods exported outside the European Union, supplies of goods placed in bonded warehouses, services rendered in connection with the above, and certain international services. 

The following domestic transactions are exempt from VAT:

• The supply of immovable property two years after putting it into use and lease. However, if the lessee’s use of the immovable property is 90% or more for input VAT-deductible purposes, the lessor and lessee may opt to be subject to VAT on rent, in which case the lessee may deduct the VAT charged in respect of the property.
• Medical, cultural, social, and educational services.
• Services provided by banks and other financial institutions in connection with payment transactions and the granting of credit facilities.
• Insurance transactions.
• Certain transactions in shares by controlling active parent companies and transactions by commercial share dealers.

Effective 1 January 2020, the Netherlands implemented the ‘EU four quick fixes’ aiming to improve the day-to-day functioning of the VAT system for EU cross-border business-to-business (B2B) trade. These quick fixes concern the use of the VAT identification number, call-off stock, proof of transport, and chain transactions. The changes have consequences for the administrative systems, VAT registrations, contracts, (electronic) documents, and invoices of entrepreneurs.

Effective 1 July 2021, the Netherlands implemented the EU VAT rules applicable to cross-border business-to-consumer (B2C) e-commerce activities.

As of 2023, the 0% VAT rate applies to the supply and installation of solar panels and solar panels used as roofing materials. The 0% VAT rate only applies if the solar panels are intended to be installed on or in the immediate vicinity of private dwellings or housing.

Holding / financing companies 

Special attention needs to be given to the VAT position of holding and/or financing companies. The exact VAT status (VAT entrepreneur or not) and VAT deduction position depends on several aspects and might be complicated. 

Fiscal unity / VAT group 

The Netherlands allows legally independent businesses that are closely bound to one another by financial, economic, and organisational links to be treated as a single taxable person. 

Transactions between head office and branch in scope of VAT in case of VAT group 

As of 1 January 2024, the Decree of the State Secretary of Finance on VAT fixed establishments will be amended. Cross-border services between a head office or VAT fixed establishment that is part of a VAT group and a VAT fixed establishment or head office established outside that EU member state will be subject to VAT.  

The change to the Dutch VAT group regime as per 1 January 2024 could have a significant (financial) impact. This applies both to the impact for establishments in the Netherlands as to establishments in other member states. Since the services will become VATable, reverse charge VAT may be due in the Netherlands for charges of (a) foreign establishment(s) to Dutch establishment(s). Furthermore, the change may affect the right to deduct input VAT in case Dutch establishment(s) charge amounts to other fixed establishment(s) outside of the Netherlands. The fact that services between establishments will be in scope of VAT as of 2024 does not mean that all charges will result in VAT consequences. It, for instance, needs to be determined if for all transactions there is a remuneration for a service for VAT purposes and/or if it may be possible to apply a VAT exemption on (part of) the transactions.

Customs and excise tax

Many goods imported to the Netherlands from outside the European Union are subject to customs and excise duties. The tariffs and rates that apply to the different goods vary widely and change regularly.

An excise tax is levied on certain consumer goods (e.g. cigarettes, cigars, mineral oils, alcoholic products). If the goods are used solely as raw materials, no excise tax is levied. The excise tax is refundable if the article is exported.

Extension of the reduced tax on unleaded petrol, diesel and liquefied petroleum gas (LPG)

As of 1 April 2022, the government reduced the tax on unleaded petrol, diesel, and LPG in order to mitigate the increase in energy prices. The envisaged termination of the tax reduction is postponed until the end of 2024.

Reduced energy tax rate for charging stations up to and including 2024

The owner of a charging station with a connection to the power grid (almost without exception, charging stations in public) pays a lower energy tax rate on the electricity supplied. This reduction is primarily intended to make the installation of charging stations financially more attractive but will also indirectly contribute to more supply and lower rates.

Carbon Border Adjustment Mechanism (CBAM)

As of October 2023, every importer of CBAM goods with a value of more than EUR 150 per shipment will need to report the embedded emissions of goods imported into the European Union on a quarterly basis. This report is submitted to the European Commission through the CBAM Transitional Registry.

Transitional phase

From October 2023 to January 2026, CBAM is in its transitional phase. In this phase, importers of goods in the scope of CBAM will only have to report greenhouse gas (GHG) emissions embedded in their imports (direct and indirect emissions).

CBAM initially applies to imports of certain goods and selected precursors whose production is carbon intensive and at the most significant risk of carbon leakage: cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen.

CO₂ levy for industry

A Dutch national CO₂ levy is in place as of 1 January 2021 for certain industrial production and waste incineration. This levy is introduced alongside the existing system for the pricing of CO₂ at EU level (EU-ETS). Companies will be eligible for an exemption of the CO₂-levy (which will decrease over time) on part of their emissions (dispensation rights and ETS-discount) so that they can change their operations in order to reduce their CO₂ emissions. There are possibilities for using a surplus of dispensation rights for transfer purposes.

Due to the high price for allowances for ETS installations in 2024, the Dutch levy payable for 2024 will be EUR 0 for installations covered by the EU ETS.

CO₂ minimum price for industry 

As of 2023, a CO₂ minimum price is in force for the emissions of industrial companies that are covered by dispensation rights. 

The CO₂ minimum price has been set at the same amount as the minimum CO₂ price for electricity generation and will increase on a linear basis. The CO₂ minimum price is only applicable if the relevant EU ETS forward rate is lower than the CO₂ minimum price, which is not the case for 2024.

Mining Act

The rate of the special levy that oil and gas operators pay, will be temporarily increased. The levy will be 65% for 2023 and 2024 on the turnover insofar as realised with the sale of natural gas at an average price higher than EUR 0.50 per m₃. The tax-free base and regular rates will remain the same, so that the position of licence holders will not deteriorate and the infringement of property rights (ECHR) will be limited.

Immovable property tax

Municipalities impose an annual immovable property tax on the owners of immovable property. The rates depend on the municipality. The taxable basis is the market value of the immovable property. Please note that the (assessment of the) value is also of importance for CIT, as depreciation might be limited based on this value (see Limited depreciation of immovable property in the Deductions section).

Transfer tax on immovable property

Acquisition of economic or legal ownership of immovable property in the Netherlands is subject to a transfer tax over its market value. The general tax rate of the transfer tax is 10.4% as of 1 January 2022. It is relevant whether the buyer will actually live in the property on a long-term basis (so no holiday homes or buy-to-let properties) to be eligible for the lower tax rate of 2% or the tax exemption for starters under 35. Otherwise, the general transfer tax rate of 10.4% will be applicable.

Young first-time buyers on the housing market are eligible for a transfer tax exemption once. Someone will qualify as a first-time buyer if they are at least 18 years old but under the age of 35 when they purchase their first house. Buyers aged 35 and over, and buyers younger than 35 who already used the exemption once, will pay the transfer tax at the reduced rate of 2% when buying a home. There is a maximum housing value limit of EUR 510,000 (2024) for the one-off exemption. This limit applies to the entire dwelling and not to the value of the part of the dwelling acquired. Starters who buy a more expensive house pay 2% transfer tax on the entire amount of the property just like other home buyers.

Transfer tax on acquisition of shares in a real estate entity

The acquisition of shares in an entity that owns real estate may also be subject to transfer tax if that entity is characterised as a so-called real estate entity. The threshold for qualifying as a real estate entity is met if more than 50% of the assets of the entity consist of real estate and at least 30% consist of Dutch immovable property.

VAT/transfer tax concurrence scheme share transactions involving real estate entities

The transfer tax concurrence exemption changes in 2024 in order to create a level playing field between share transactions and 'bricks and mortar' transactions. This relates to situations in which a company owns newly developed real estate and whereby the shares are transferred rather than the real estate itself (the ‘bricks and mortar'). In such instances, currently neither VAT nor transfer tax is payable. If the real estate in the corporation is used less than 90% for VATable services (such as the rental of residential properties or real estate in the education or healthcare sector), from 2024 the acquisition of the shares is subject to a 4% real estate transfer tax.

Stamp duty

There are no stamp duties in the Netherlands.

Capital tax

The Netherlands do not levy capital tax on capital transactions (e.g. issue or increase of capital).

Payroll taxes

Employers must withhold wage tax from the employee’s gross salary and transfer the amount to the tax authorities. Employees treat the withheld wage tax as an advance levy of income tax. The income tax due is settled with the withheld wage tax. The tax tables applicable to individuals are provided in the Taxes on personal income section of the Netherlands Individual tax summary.

Social security contributions

Employers must withhold national insurance contributions from the employee’s salary at an aggregate rate of 27.65% calculated on the first EUR 38,098 (2024) of each employee’s gross salary and transfer the amount to the tax authorities. The employer bears the burden of the employee’s insurance contributions, which are also calculated by reference to the employee’s salary. Under circumstances, it may be required to pay or withhold a contribution based on the Health Care Insurance Act.

Insurance tax

An insurance tax is payable on insurance premiums if the insured is a resident of the Netherlands or if the insured object is in the Netherlands. The insurance tax rate is 21% (2023). Several exemptions are available (e.g. insurances of ships and aircraft operated in international traffic are exempt from insurance tax). In certain situations, an insurer outside the European Union may be required to take on a tax representative in the Netherlands.

Waste management contribution

Companies annually bringing 50,000 or more kilograms of packing material on the market must pay a ‘waste management contribution’ (Afvalbeheersbijdrage). The amount payable varies according to the total weight and type of packaging. The contribution aims to cover the costs of recycling package materials. Companies that are not resident in the Netherlands but sell to Dutch consumers, are also liable to the waste management contribution, subject to the threshold of 50,000 or more kilograms.

Producers and importers of packaging expecting to exceed the threshold must register with the Packaging Waste Fund (Afvalfonds Verpakkingen) upfront. In the current year, they must file an estimation of the expected total volume of packing material. The contribution is then provisionally calculated. Before 1 April of the next calendar year, the actual amount and type of packaging must be reported. The actual contribution payable is recalculated accordingly.

The legal concept of producer or importer covers (since 2023) any natural or legal person established in the Netherlands who:

• markets products in a packaging
• professionally imports products in a packaging
• professionally instructs another party to provide the packaging of products with one’s name, logo, or mark, or
• markets packaging intended to be added to it when products are made available to the user,

as well as any natural or legal person established abroad who directly sells products in packaging to consumers in the Netherlands through distance contracts.

This means that, for instance, supermarkets and private-label holders will be responsible for declaring the packaging of their private labels.

If a trademark holder is not established in the Netherlands, or if there are imports outside the trademark holder, the responsibility remains with the importer established in the Netherlands.

Under strict conditions, parties can, through a tailor-made agreement, shift the contribution obligation back to the manufacturer. The situation as applicable until 1 January 2023 will thus be restored.

Aviation Tax Act 

As of 1 January 2021, a national aviation tax has been introduced. In the case of passenger flights departing from the Netherlands, a levy of EUR 29.05 (2024) per departing passenger is due. The levy will not be imposed on transit passengers and children under the age of two years old.

As of 1 July 2024, the take-off weight of an aircraft for passenger transport is reduced. As a result, the departing passenger on board an aircraft between 4,000 kg and 8,616 kg is also included in the flight tax.