This article describes what the rules regarding value added tax (VAT, btw in Dutch) are if you receive services from or render services to the UK.
Services and VAT during the transition period
The following paragraphs explain the VAT rules for purchasing services from the UK, or selling services to the UK, during the transition period: until 31 December 2020.
Services received from the UK
If you purchase services from a UK business, they will usually be taxed in the Netherlands. Your UK supplier reverse-charges the VAT to you. You declare this VAT in your VAT return. There are some exceptions to this general rule, for instance for real estate services, short-term rental of a vehicle, or catering services (view all exceptions, in Dutch); when in doubt, use the (Dutch language) Tax Administration calculation aid Services Abroad.
Services rendered to the UK
Should you charge a British client VAT over services rendered? It depends on whether your client is a private individual or a business. Generally speaking, the following rules apply: if your client is a private individual, you charge Dutch VAT. If your client is a company, you don’t usually charge VAT. The client is responsible for calculating and paying British VAT.
There are some exceptions to this rule. In some cases, the British Tax Office will decide that you can reverse-charge VAT to your client, or you have to charge British VAT. In the latter case, you will need a British VAT registration. To make certain if you should charge VAT, and what type of VAT to charge, use the Dutch Tax Administration Services Abroad calculation aid.
Threshold sums for long-distance sales
Normally, if you sell products to a person or business in another country (in other words, you engage in long-distance sales), you need to register for VAT with the Tax Administration in that country. The EU member states have agreed upon threshold sums, so that if you only make one or two long-distance sales to private individuals, you won’t have to register with the foreign Tax Administration and charge that country’s VAT. For the UK, the threshold sum is €80,197. If the total of your dealings with the UK comes to a higher amount, you have to charge British VAT and register with the British Tax Office.
Services and VAT after Brexit
Details on the VAT rules under the new trade agreement between the EU and the UK will be published here, as soon as the information becomes available.3 tips
- Apply for an EORI number (in Dutch). You need this Customs identification number for international trading.
- Read up on Starting to export
- Read up on Starting to import
More information
- Brexit Preparedness Notice: European Commission advice on the changes in VAT rules and VAT refunds on the delivery of products and services to the UK.
- Trade Tariff database: British government information on the VAT rates per product.
- Keep Business Moving: UK government information for EU businesses.