What is BTW (Belasting over de Toegevoegde Waarde)?
BTW is Dutch VAT (Value Added Tax). The standard rate is 21%, the reduced rate is 9% (food, books, medicines, passenger transport), and 0% applies to exports. Businesses under EUR 20,000 annual turnover can use the KOR small-business exemption. Most businesses file quarterly BTW returns via the Belastingdienst portal.
Current Rate (Quarterly returns (monthly if annual turnover exceeds EUR 1 million); due 1 month after period end)
21% standard, 9% reduced, 0% exports; KOR exemption under EUR 20,000 turnover
Example
A Dutch marketing agency charges EUR 10,000 for services. It adds 21% BTW = EUR 2,100, invoicing EUR 12,100 in total. If its own costs included EUR 840 input BTW, it remits EUR 2,100 minus EUR 840 = EUR 1,260 to the Belastingdienst.
How BTW (Belasting over de Toegevoegde Waarde) works in Netherlands
BTW (Belasting over de Toegevoegde Waarde) is the Dutch implementation of the EU VAT Directive. It applies to nearly all goods and services supplied in the Netherlands by businesses.
**Three rates**
- 21% standard rate: applies to most goods and services, commercial rent, professional services, software, digital services - 9% reduced rate: food and drinks (not restaurant/hotel), medicines, books (print and digital), newspapers, passenger transport, cultural events, hairdressers, some agricultural goods - 0% zero rate: exports to non-EU countries, intra-EU B2B supplies (followed by ICP reporting), some specific categories
**BTW registration**
Any business making taxable supplies in the Netherlands must register for BTW with the Belastingdienst before starting operations. No turnover threshold for most businesses (unlike the UK's GBP 90,000 threshold). Upon registration, the Belastingdienst issues a BTW-nummer (tax number) and a BTW-identificatienummer (BTW-id). The BTW-id has the format NLxxxxxxxxxxxxxxxxB01 (18 characters including the country code and B + 2 digits suffix) and must appear on all sales invoices for B2B transactions.
**Filing returns**
Most businesses file quarterly BTW returns (aangifte omzetbelasting). The return and payment are due by the last day of the month following the quarter end: 31 January, 30 April, 31 July, 31 October. Returns are filed electronically via Mijn Belastingdienst Zakelijk. Businesses with over EUR 1 million annual turnover must file monthly.
**ICP declaration (Opgaaf ICP)**
For B2B supplies of goods or services to VAT-registered businesses in other EU member states (intra-community transactions), a separate ICP declaration (intracommunautaire prestaties) must be filed quarterly (or monthly for large suppliers). This allows the EU to cross-check VAT across borders.
**KOR small-business scheme**
Businesses under EUR 20,000 annual turnover can register for the KOR (Kleineondernemersregeling) to avoid charging BTW and filing returns. However, they also cannot reclaim BTW on their own purchases. Once registered, KOR applies for at least 3 years.
**Reverse charge**
For B2B cross-border services from EU suppliers, the Dutch recipient accounts for VAT under the reverse charge mechanism. Specific sectors (construction, scrap metal) also use domestic reverse charge.
**OSS (One Stop Shop)**
Dutch businesses selling goods or digital services to consumers (B2C) in other EU countries can use the One Stop Shop to report and pay all EU consumer VAT via the Dutch Belastingdienst portal, avoiding registration in each country.
Related terms
The Kamer van Koophandel (KvK) is the Dutch Chamber of Commerce, which maintains the Handelsregister (commercial register). Every business in the Netherlands must register with the KvK within one week of starting operations. The KvK issues an 8-digit KvK number, which is the primary commercial identifier for the business.
The KOR (Kleineondernemersregeling) is a Dutch small-business VAT exemption for businesses with annual turnover below EUR 20,000. Businesses registered under KOR do not charge BTW on sales and do not file BTW returns, but also cannot reclaim input BTW on purchases. KOR is opt-in and applies for a minimum of 3 years.
A Besloten Vennootschap (BV) is a Dutch private limited company, the most common corporate structure for entrepreneurs, SMEs, and foreign investors setting up in the Netherlands. Since the 2012 Flex-BV law, minimum share capital is EUR 0.01. The BV is a separate legal entity; its shareholders have limited liability. Shares are not publicly tradeable.
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