The Government of Netherlands has proposed an increase in the current reduced VAT rate from 6% to 9% on Budget Day, 18 September 2018 for their 2019 tax plan. These rates are effective from January 1st, 2019, based on the approval by the House of Representative and the Senate.
The reduced rate will apply to some key supplies, with the affected businesses being hotels, restaurants, domestic transports and intra community transport services. These will also affect the periodicals and admissions to various events including sports and cultural events.
Note- If payments are already made in 2018 for the supply of goods or services to be delivered in 2019, then the previous rate of 6% applies.
What does this mean for you?
This increase in rates will affect administrative records, the price of the goods/ services and invoicing. Businesses need to implement this increase in the reduced VAT rates in their systems to ensure correct rates are applied. This can mean that the quotations given in 2018 for goods and services to be supplied in 2019 need to be adjusted for the new, higher VAT rate.