VAT on services abroad

Providing services to entrepreneurs

Do you provide services to foreign entrpreneurs (business-to-business)? These services are usually subject to VAT in your client's country.

Check using the Netherlands Tax Administration’s tool (in Dutch) whether the service is subject to VAT abroad. The following situations then apply regarding VAT.

• Is the client from a country outside the EU? In that case, you must ask the tax authorities of that country whether you need to file a return. You do not include VAT on the invoice. And you do not declare this service in your Dutch VAT return.
• Is the client from another EU country? In that case, you reverse-charge the foreign VAT to the customer. The customer then calculates and pays the foreign VAT in their own country. You will also usually need to submit an ICP return.

If you are unsure what to do, you can contact the Tax Information Line for assistance.

How does reverse-charging VAT work for cross-border transactions?

When you reverse-charge VAT to a customer in another EU country, you do not include VAT on your invoice. Instead, you write ‘VAT reversed’. You must also include the customer’s VAT identification number on the invoice. Have you reversed foreign VAT? If so, you must declare this to the Tax Administration in your VAT return and via an ICP return.

Filing an ICP declaration

In addition to your turnover tax return, you usually have to file an intra-Community transactions (ICP declaration) with the Tax Administration. This is required if:

• you perform the service for a customer inside an EU country
• you perform the service for a customer with a VAT number and
• your service is taxed in the customer's country

Find more information about the ICP declaration (in Dutch) on the Belastingdienst website.

Providing services to private individuals

Do you supply services to consumers (business-to-consumer) or an organisation without a VAT number abroad? If so, these are usually taxed in the country where you are established. This means that you charge your customers the VAT rate of the country where your business is established. Sometimes different rules apply to the location where the service is taxed with VAT (in Dutch).

Use the Union scheme (one-stop shop) for your VAT returns

Do you need to pay VAT in another EU country? And are your customers private individuals? If so, you can use the Union scheme. This allows you to submit your quarterly VAT returns within the EU via the one-stop shop (OSS). This means you do not need a separate VAT number in every EU country or to manage your VAT affairs on a country-by-country basis.

The small businesses scheme (KOR) for services in EU countries

Do you do business in other EU countries? And is your total annual turnover no higher than €100,000? If so, you may be able to participate in the small businesses scheme in the EU (EU-KOR) in one or more EU countries. You will then receive a VAT exemption for that EU country. Check how the EU-KOR works and which conditions you must meet (in Dutch).