Reverse charge in The Netherlands
Reverse charge for non-established suppliers – The Netherlands
According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on supplies made by non-established businesses. The Netherlands has introduced this reverse charge on supplies of goods and services located in The Netherlands.
Where a non-established supplier supplies goods or provides services located in the Netherlands to a VAT registered and established customer, domestic reverse charge applies. It is not relevant if the supplier is registered or not.
Supplier requirementsNot established in The Netherlands (irrelevant if the supplier is registered or not for VAT)
Customer requirementsEstablished in The Netherlands
ScopeSupplies of goods and supplies of services located in The Netherlands
The domestic reverse charge on services is rather exceptional as it would only apply where the B2B rule on services does not apply. This is, for example, the case for supplies of services connected to immoveable property.
The following wording should be stated on the invoice when domestic reverse charge by non-established suppliers applies: "btw verlegd / Reverse charge applies according to article 12, para 3 of Dutch VAT law".
Reverse charge in B2B services in The Netherlands
Article 196 of the VAT Directive requires the reverse charge mechanism on all services subject to the B2B rule introduced in art. 44 of the same Directive. The B2B rule locates the transaction where the business customer is located. In case the customer is a private individual, B2C rules locate the transaction where the supplier is located.
According to the general B2B rule, any business resident outside the Netherlands supplying services to a Dutch based customer will not charge any VAT and the transaction will be reverse charged by the customer.
There are however a number of exceptions to this rule. Where these exceptions apply, reverse charge is still applicable in the Netherlands provided domestic reverse charge conditions are met:
- Services connected to immoveable property are located where the property is located.
- Passenger transport services will be located where the transport takes places (apportioned if necessary).
- Catering services are located where the catering takes place.
- Short term leasing of means of transport are located where the vehicle put at the disposal of the customer.
- Access to conferences, fairs and exhibitions is located where the event takes place.
The general rule may also be deviated where the supplier has a permanent establishment in the country of the customer and the PE has intervened in the supply."
Dutch reverse charge on specific goods
Domestic reverse charge may also apply on certain goods and services in The Netherlands. The conditions and scope are different in each case. In some instances, this kind of reverse charge also applies when the supplier is established.
- Natural gas and electricity must be reverse charged where supplied by a non-established supplier to a "taxable dealer". Also, non-established companies can be taxable dealers for the purposes of this reverse charge, hence it would apply even if the customer is not established
- Mobile phones, computer chips, IT equipment including laptops, tables and game consoles where the sale value exceeds €10,000
- Construction work and ancillary services from a subcontractor to a contractor and from a contractor to a self-builder
- Supplies of goods released from a VAT warehouse
- Immoveable property (where opted to tax) irrespective of supplier and customer status
- CO2 Emissions
- Old used materials, scrap and waste irrespective of supplier and customer status
- Goods provided as security by one taxable person to another as part of a security
- Investment gold
- Telecommunication services (since June 2017).