0% VAT rate - Explanatory Notes Table II

In the Netherlands there are three VAT rates:

- 21%

- 9%

- 0%

The legal system is designed in such a way that the 21% rate always applies, unless the entrepreneur's transaction (goods and services) meets the conditions of the 9% or 0% rate. The number of different transactions that can be subject to the 9% and 0% rate is enormous. This also applies to the conditions, which differ per transaction. To give you an example, there are already 10 different categories (!) of transactions for the application of the 0% rate on the supply of goods. For example, goods that have not yet been imported (placed under a customs procedure), goods under excise duty suspension (e.g. storage in an excise warehouse) and intra-Community supplies (goods delivered to an entrepreneur in another Member State). The number of different transactions and conditions is one of the reasons why there has been Explanatory Notes to Table II for many years. These Explanatory Notes are issued by the State Secretary for Finance.

Table II of the Dutch VAT Tax Act lists all possible 0% transactions. To clarify the conditions per transaction, a further description of those conditions is given in the Explanatory Notes. The Explanatory Notes also provide insight into the approvals that may apply per transaction. These approvals are widely used in practice.

In December 2023, the Explanatory Notes were completely updated and now consist of a 90-page document. What is immediately noticeable is that the Explanatory Notes are now considerably more extensive and the explanations/approvals per transactions have increased. Since the explanations for these types of publications are very brief, it is currently not possible to indicate what has/has not changed per transaction. This should become clear in the near future.

The new Explanatory Notes will come into effect on April 1, 2024.

If you would like to know more about the new Explanatory Notes and the possible changes that apply to your transactions, please do not hesitate to contact us.

If you have any questions about this topic or if you would like to discuss the topic further, please do not hesitate to contact us at info@vatpartners.com