Changes Dutch VAT in 2019

14 January 2019

The main changes for VAT in the Netherland in 2019 are as follows:

Reduced VAT rate

The reduced VAT rate has been increased to 9 percent per 1 January 2019.

Zero rate for seagoing vessels

From 1 January 2019 the VAT zero rate for supplies of goods and services to commercial seagoing vessels is restricted to ships used for at least 70% on the high seas, outside the 12-mile zone and used for 90% or more for commercial activities.
The entrepreneur supplying the service must be able to prove this. In addition the zero rate only applies in case of supplies actually performed directly to the operator of the ship (i.e. not on supplies to an agent / intermediary).

Sports exemption

The Dutch VAT exemption for supplies by non-profit sport entities to their members has been adjusted. From 1 January 2019 the exemption for sports services by non-profit sport entities now also applies to supplies to non-members but also to sports facilities foundations and other entities operating the sports facilities below the cost price. The exemption now is in line with article 132 (1)(m) VAT Directive.

Sports organizations within the scope of the VAT exemption can, under certain conditions, apply for a subsidy for investments in sports facilities and sports equipment, as well as the maintenance thereof.

A distinction is made between single purpose vouchers (SPV) and multi purpose vouchers (MPV). For a SPV, the VAT is due at the moment of the sale of the voucher. For a MPV VAT is only due when the voucher is redeemed. In case of a MPV it is not clear which country may levy the VAT or at what VAT rate. The new rules apply to vouchers issued after 31 December 2018. On vouchers issued before 1 January 2019, the old rules are still applicable. Term for a request of a VAT refund
A refund of VAT in general has to be requested via a VAT return. It is necessary to request the tax administration to be invited to file a VAT return if an invitation to do so was not received. Until 1 January 2019, this request did not have a formal deadline. From 1 January 2019 a taxpayer must request a declaration within six months of the end of the calendar year in which the right to a refund arose. A transitional arrangement will apply until 1 July 2019. If a right to a refund has arisen before 1 January 2019, the registration for a VAT number (formally: the request to be invited to file a VAT return) can still be made until 1 July 2019 (and is still on time).

Dutch Small Enterprises arrangement will change to exemption per 1 January 2020

The Dutch arrangement for small enterprises (KOR) will be replaced by an optional turnover-related vat-exemption (OVOB) implemented from first of January 2020. This new OVOB - a real exemption (without credit) - can be applied by all entrepreneurs, regardless of the legal form, unless they exceed a turnover of € 20.000 per year.

The option for this exemption can be filed from the 1st of June 2019. The choice to apply or end the small entrepreneur’s exemption is for a period of three years. As a simplification no adjustments of deducted VAT on investments have to be made below a limit of € 500.

Author: Pieter Tielemans, HLB Netherlands

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