Reclaiming VAT on imports in the Netherlands for Non-EU Companies

For businesses outside the EU looking to expand into the Netherlands, navigating the complex world of international trade regulations, customs, and import taxes can be daunting. If you’re aiming to make inroads into the Dutch market, understanding how to get a VAT refund in the Netherlands can help offset some of the associated costs. This process involves grasping the Dutch VAT system, registering for VAT, and strategically using the reverse charge mechanism, among other financial strategies. It’s not just about compliance; it’s about ensuring your business remains viable under the VAT Act, so your Dutch ventures are not only legally sound but also financially rewarding.

Embarking on the journey to recover import VAT in the Netherlands requires first understanding the criteria for VAT refunds, learning how to correctly file VAT returns, and properly utilizing import documentation. In this guide, we’ll walk you through the process of obtaining your VAT refund. We’ll cover the importance of an Article 23 license, how to interact with customs using a Dutch EORI number, and ensuring compliance with VAT deadlines. We’ll also highlight common pitfalls to avoid when seeking a VAT refund, such as misunderstandings about VAT-exempt goods or import procedures under the IOSS system. Additionally, we’ll explain the role of a fiscal representative and outline the steps for claiming an EU VAT refund, equipping non-EU businesses with the knowledge to navigate Dutch taxation effectively.

Grasping VAT on Dutch Imports

When bringing goods into the Netherlands from non-EU countries, you must declare them to Customs. This action requires paying VAT on these imported items. The VAT rate matches that of domestic goods and services, ensuring fair treatment across all sales. Import duty and VAT are due when the items first enter the EU. The customs value of the products includes their price, plus shipping, insurance, and any other costs up to the EU border.

How is Import VAT Applied?

For companies importing goods, like buying products from China and shipping them to the Netherlands, the process involves declaring these items under the importer’s name and paying Dutch VAT based on the customs value. This value includes the goods’ price plus related costs like shipping and insurance up to the EU’s external border. It’s important for non-EU businesses to note that they can’t use the reverse-charge mechanism on these imports. Instead, they might consider using a tax representative who can apply the reverse-charge mechanism on their behalf, potentially easing the immediate financial burden of VAT payments at customs.

Obtaining a Dutch EORI Number: Process and Purpose

An EORI (Economic Operators Registration and Identification) number is required for all Dutch companies involved in EU trade. This unique identifier is crucial for smooth customs operations and is needed for both importing and exporting goods. Dutch companies can either use their existing tax reference number or apply through a standard process to get an EORI number. This number helps customs authorities track trading activities and simplifies customs declarations and clearances.

For companies without an EORI number, the application involves submitting a form on the Dutch tax authority’s website or getting help from service providers to speed up the process. This number is vital for international trade, especially when dealing with customs declarations abroad, as it ensures faster and more efficient customs processing.

In essence, understanding and managing import VAT and securing an EORI number are key steps for non-EU businesses aiming to operate effectively in the Netherlands. These processes ensure compliance with EU rules and facilitate smoother trade operations in the region.

Qualifying for VAT Refunds

To be eligible for a VAT refund in the Netherlands, non-EU businesses must meet certain criteria that ensure they don’t engage in regular economic activities within the EU. These criteria aim to prevent businesses with a permanent EU presence or frequent EU supplies from claiming refunds, thus maintaining the VAT system’s integrity.

Requirements for Non-EU Businesses

A non-EU business can qualify for a VAT refund if, during the refund period, the business:

1. Wasn’t based in any EU Member State.
2. Didn’t supply goods or services in the EU Member State from which they’re claiming the VAT refund, except for:

• Exempt transport and related services as outlined in Articles 144, 146, 148, 149, 151, 153, 159, or 160 of the VAT Directive.
• Supplies to customers responsible for paying the associated VAT under the reverse-charge system, as per Articles 194, 196, or 199 of the VAT Directive.

These rules ensure that only businesses truly outside the EU tax zone and not making taxable supplies within the EU, except in specific exempt cases, can get a refund.

Required Documents

To successfully claim a VAT refund, non-EU businesses must provide thorough documentation, including:

• Evidence that the business is set up outside the EU.
• Invoices and import papers showing VAT paid in the Netherlands.
• Proof that the business doesn’t need to file a VAT return in the Netherlands.

Also, businesses must meet the minimum amount thresholds for refund requests:

• €400 for a request covering at least 3 months but less than a full calendar year.
• €50 for a request covering a whole calendar year or its final part.

Requests must be sent in before October 1 of the year after the year for which the VAT refund is asked. For example, for VAT paid in 2022, the refund request must be sent by October 1, 2023. Businesses need to make sure they have the right login details to submit VAT refund requests, which they can get through the Dutch Tax and Customs Administration’s online tools.

By meeting these criteria and providing the needed documents, non-EU businesses can navigate the VAT refund process effectively, ensuring they follow the rules and optimize their tax operations in the Netherlands.

Steps to Get a VAT Refund

To get a VAT refund in the Netherlands, non-EU businesses must follow several administrative steps. These steps ensure they comply with Dutch tax laws and can successfully reclaim VAT on business-related imports.

Sign Up for VAT as a Foreign Business with House of Companies’ Help

Foreign companies working in the Netherlands without a VAT representative need to deal directly with the Tax and Customs Department of International Issues. First, the business owner should fill out a special form to register foreign business aid, which includes questions to check if they’re eligible right away or if they need more registrations, like a VAT number. House of Companies can help make this process smoother, making sure all requirements are met efficiently.

Submitting the VAT Return (Tax office Heerlen, or e-herkenning)

Once registered, detailed records of all transactions must be kept. This means 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 important to make sure all paperwork is carefully prepared to avoid any issues 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 usually starts. Refunds are typically paid automatically into the business’s foreign bank account, as long as the Dutch tax authorities have all the required IBAN details. The first repayment might lead to a request from the authorities to fill in more details to help with future transactions. Businesses should follow up with the tax authorities to avoid delays. It’s also possible to ask for the VAT credit to be carried forward and used against future VAT payments, which can be helpful for ongoing import activities.

By following these steps and using services offered by companies like House of Companies, non-EU businesses can effectively manage their VAT obligations in the Netherlands, making sure they get the most out of their potential VAT refunds while staying compliant with local rules.

Key Dates and Timelines

Important Submission Dates

For non-EU businesses operating in the Netherlands, it’s crucial to stick to the following VAT return and payment deadlines to ensure compliance and avoid penalties:

• Quarterly Returns: The last day of the month after the quarter ends is the deadline for both filing and payment. Specifically, the deadlines are January 31 for the 4th quarter, April 30 for the 1st quarter, July 31 for the 2nd quarter, and October 31 for the 3rd quarter.
• Annual Returns: The deadline for the annual VAT return and corresponding payment is March 31 of the following year.
• Monthly Filings: If applicable, the last day of the month is the deadline for filing and paying VAT for the previous month.

Businesses must file a zero return even if no VAT was collected or paid during a period to stay compliant.

Processing Times

The Dutch Tax Administration handles VAT refunds quickly after filing. Usually, refunds go straight to the foreign bank account on file. For the first refund, they might ask for extra details to check the account, which can slow things down. Businesses should answer any questions from tax authorities promptly to speed up their refunds.

Interest on VAT Paid or Charged by Belastingdienst.nl

Interest applies in certain cases:

• Late Payment Interest: If VAT payments are late, interest builds up from the day after the due date until the payment reaches the Tax Administration’s account. This isn’t a penalty but makes up for the time value of money.
• Receiving Interest: If the Tax Administration is late with a refund by more than six weeks, they’ll pay interest to the business. This ensures fairness on both sides.

Businesses can challenge the interest charged by writing a detailed letter to the Tax Administration, explaining why they object and providing proof to back up their claims.

Understanding these key dates and processing rules helps businesses manage their VAT duties in the Netherlands better, ensuring they comply on time and run their finances smoothly.

How to Avoid Common Mistakes

Common Errors in VAT Refund Applications

Non-EU businesses often make mistakes when trying to get a VAT refund in the Netherlands. First, the rules for who can apply are strict; businesses can’t be based in any EU country or provide goods or services in the country they’re claiming the refund from, except for certain transport services or supplies to customers who handle the VAT themselves. Not understanding these rules can lead to failed refund claims.

Also, having accurate paperwork is crucial. All bills, receipts, or vouchers must have detailed info like the supplier’s VAT number, the cost without VAT, and the VAT amount charged. For bigger purchases, more details like the supply date and an ID number are needed. Mistakes in these documents can delay or stop refund claims.

Best Practices

To make the VAT refund process smoother and avoid common errors, businesses should follow some key practices. First, keep detailed records, including original bills and import documents, as copies often don’t work. Have these ready for electronic submission, and make sure all info is correct to avoid penalties for wrong applications.

Second, start the VAT refund process right after making the first eligible purchase. This helps gather and submit necessary documents on time. Using digital tools, like the ‘NL Customs VAT’ app, can help, especially at entry points like Amsterdam Airport Schiphol where digital processes are used.

Lastly, ask for tax-free shopping when buying and fill out all refund forms before leaving. Keep purchased items easy to access for customs checks, and have all paperwork ready for a smooth verification at customs to secure a VAT refund without issues.

Resources and Further Assistance

Non-EU businesses looking for help with getting a Netherlands VAT refund on imports can find various resources and professional support to make the process easier and ensure they follow local rules.

Relevant Contacts and Web Resources

Non-EU businesses can get comprehensive information and help through the Dutch Tax and Customs Administration’s official website. Here, they can find necessary forms like the ‘Application for VAT refund for entrepreneurs based in non-EU countries.’ It’s important to submit these forms before specific deadlines to ensure VAT refunds are processed on time. For detailed questions, businesses can directly contact the Tax and Customs Administration, which provides guidance on VAT refund eligibility and how to submit applications.

Additionally, the Dutch Tax Office provides specialized support for non-EU companies doing business in the Netherlands. By reaching out to their regional branches, firms can get expert guidance throughout the VAT refund process. This personalized help ensures all paperwork, including import documents and invoices, is properly prepared and submitted.

Getting Expert Assistance

Working with a professional tax representative or customs broker can greatly help non-EU businesses manage their VAT obligations in the Netherlands. These experts make sure all import paperwork is handled correctly and that import VAT is properly claimed back. They can also help register the business as a foreign entrepreneur, which is needed to file for a VAT refund.

For businesses using a customs broker, it’s important to know that the original import documents might not be returned. However, the VAT paid will be listed on the customs broker’s invoice, and businesses can claim this amount back, not including import duties.

By using these resources and getting professional help, non-EU businesses can effectively handle the complexities of Dutch VAT, making sure they get the most refunds possible while following all necessary rules.

Wrapping Up

This detailed guide has walked through the complex process non-EU businesses must follow to get a Netherlands VAT refund on imports. From understanding import VAT and who can apply, to the steps for filing refunds and meeting key deadlines, this information aims to help businesses navigate Dutch VAT laws successfully. It highlights the need for careful record-keeping and following regulations, ensuring non-EU businesses can make the most of financial opportunities in the Netherlands.

While getting VAT refunds in the Netherlands can be tricky, expert help makes it much easier. For businesses looking to simplify their VAT filing, House of Companies offers automated services that fit smoothly into their operations. Ask for a demo and handle your Dutch VAT yourself for a set yearly fee. By taking proactive steps and using professional support, businesses can not only follow the rules but also improve their financial efficiency in the Dutch market.

Key Rules and Regulations

Local vs. International Rules

The Netherlands follows EU VAT rules, setting its standard VAT rate above the EU’s 15% minimum. For imports, non-EU businesses must follow these rules closely. Import VAT usually matches the local rate, currently 21% or 9% for certain goods. Non-EU companies can register as foreign entities and use a Dutch VAT number and EORI number for VAT. They can also use a Fiscal Representative to get an Article 23 license, allowing them to delay VAT payments on imports.

Reverse Charge System

The reverse charge system is crucial for non-EU businesses handling VAT in the Netherlands. It shifts VAT payment responsibility from seller to buyer in certain cases. For goods, if a foreign business sells to a VAT-registered Dutch customer, the customer handles the VAT. This also applies to some services, especially those related to property, where VAT is paid where the property is.

Key examples include building work, IT equipment sales over €10,000, and telecom services, where reverse charge applies regardless of VAT registration. For B2B services under general rules, the Dutch customer handles VAT instead of the foreign business. This simplifies VAT but requires correct invoicing, stating ‘VAT reverse-charged’ to follow the rules.

Understanding these regulations helps non-EU businesses manage their VAT duties, ensuring they follow rules and can recover VAT in the Netherlands.

Managing Paperwork

Navigating VAT Refund Documentation for Imports in the Netherlands

For non-EU businesses seeking VAT refunds on Dutch imports, proper documentation is key. This section covers the essential steps and best practices for submitting import proof and tracking refund requests effectively.

Providing Import Evidence

To start a VAT refund, businesses must prepare and submit all import documents correctly. The process begins at purchase:

1. Invoice Requirement: Get an invoice in your name from the seller right after buying. The invoice must clearly show the VAT amount.
2. Customs Check: Before leaving the EU, show the invoice or a copy to Customs for checking. They’ll verify:
3. • Your non-EU resident status.
   • The actual goods for inspection.
   • That you’re exporting the goods yourself.
   • The invoice date, which should be within three months of purchase.
3. Digital Option: For easier processing, use the ‘NL Customs VAT’ app to register the invoice digitally. At places like Schiphol Airport, you can approach customs with the app open, enabling Bluetooth and location services for digital validation.

Following Up on Refund Requests

After document validation, keeping track of your VAT refund request is crucial:

1. Sending the Signed Invoice: Once customs checks it, send the signed invoice back to the seller or your refund helper. They’ll handle the VAT refund process.
2. Using Digital Tools: The ‘NL Customs VAT’ app helps track your purchases and refund request status. It tells you if you need to visit customs in person or if everything can be done digitally.
3. Watching Deadlines: Make sure to submit all refund requests before the legal deadline, usually by October 1 of the year after you paid the VAT. This helps avoid missing out on refunds due to delays.

By carefully handling import documents and tracking refund requests, non-EU businesses can make the VAT refund process smoother, ensuring they follow rules and get timely repayments. These steps help operations run better and reduce mistakes that could slow down refunds.

Legal Rules for VAT Refund Claims

Non-EU businesses must follow specific legal rules to claim VAT refunds in the Netherlands, making sure they comply with Dutch tax laws. This section outlines the criteria and documents needed for successful VAT refund claims.

Rules for Non-EU Businesses

Non-EU businesses can get a VAT refund if:

1. They’re based outside the EU.
2. They don’t need to file VAT returns in the Netherlands.
3. They’ve been charged Dutch VAT.
4. The VAT can be deducted as input tax for Dutch businesses.
5. The minimum VAT claim is €50 per year or €400 per quarter.
6. Goods and services where VAT is reverse-charged or has a 0% rate also count as taxed activities.

Note that VAT on restaurant meals can’t be deducted. However, VAT on hotel stays can be deducted if these costs relate to taxed services.

Required Legal Documents

To claim a VAT refund, you need:

• Proof of Business Location: Evidence that your business is based outside the EU.
• VAT Payment Proof: Invoices and import documents showing VAT paid in the Netherlands.
• No VAT Return Needed: Confirmation that you don’t need to file VAT returns in the Netherlands.
• Dutch Tax Registration: You must register with the Tax and Customs Administration’s International Issues Department and get a foreign entrepreneur registration number.

Submit VAT refund claims by October 1 of the year after you paid VAT. For periods of 3-12 months, the minimum claim is €400.

VAT refunds usually take 2-3 months if you’ve met all VAT obligations. Dutch authorities might check your taxes and ask for more documents about your VAT credit. Any VAT credit is automatically refunded to the bank account you provided when registering.

1. How can non-EU businesses claim VAT refunds for Dutch imports?
Non-EU businesses can claim VAT refunds in the Netherlands if their total payment, including VAT, is at least €50. They can use tax refund intermediaries to help with the process. For more details, businesses can ask the retailers or suppliers they bought goods from.

2. Are there VAT charges on goods imported into the Netherlands?
Yes, the Netherlands charges VAT on imports. The VAT is based on the customs value, which includes the cost of goods, shipping, insurance, and other related expenses up to the EU border. Foreign businesses can’t use the reverse-charge method for goods from non-EU countries.

3. How do you get a tax rebate in the Netherlands?
To get a tax rebate in the Netherlands, you need to file an income tax return for the year you had the expenses. The Dutch tax office can refund certain qualifying costs. You can find a list of eligible expenses on their official website.

4. What’s the process for filing a VAT return in the Netherlands?
In the Netherlands, you can file VAT returns online through the Mijn Belastingdienst Zakelijk portal on the Tax Administration’s website. Companies must use eHerkenning to log in. Another option is to use software from commercial providers to file VAT returns.