The standard level of Dutch VAT is set to increase from 19% to 21% in October 2012. The current ‘low’ VAT rate of 6% will remain in place. This is one of the several measures the Dutch government is taking to reduce the national budget deficit.
VAT in the Netherlands
Value added tax (VAT) is a way of taxing consumption, paid by the end consumer of a good or service. The Netherlands currently follows a standard VAT rate and a special ‘low’ rate. This low rate applies to goods that are not labelled ‘luxury’, such as many foods, pharmaceutical products, books and certain services that are very labour intensive (for example, construction and repair work). To find out which goods and services fall under the low rate, you can find a list of products here (in Dutch).
As of October 2012, the standard VAT rate will be increased to 21%. For companies that pay VAT in the Netherlands, this means that they will pay the new rate for supplies of goods or services that are carried out on or after 1 October 2012.
Information from tax consultants
Several tax consultants have issued information for companies about the tax increase such as KPMG and Ernst & Young.