Agriculture: Holland to introduce new VAT regime

11 October 2017

Earlier this year we mentioned that the Dutch tax authority intended to abolish the Dutch agriculture regime for VAT. The plan has become reality, and the regulations will be abolished effectively as per 1 January 2018.

Owing to the abolition of this regime, groups formerly exempted from this scheme – farmers, livestock farmers, gardeners and foresters – will need to start up their own VAT administrations. This will allow them to deduct VAT charged to them (input VAT).

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Effects on enterprises outside the agriculture sector

The abolition of the VAT regime will also affect several enterprises not directly related to agriculture. Services to livestock farmers, gardeners and foresters were subject to the lower tariff (6%). This included (but was not limited to) services by agricultural contracting firms, breeding services, inspection and research related to artificial insemination and embryo transplantation, as well as services provided by accounting and tax consultancy firms.

With the abolition of the agriculture regime in VAT these services are subject to the regular tariff (21%). On some occasions, the regular tariff will be applicable though no deductions will be allowed. This is the case if the services are provided before 1st January 2018.

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