Invoicing abroad: Dutch VAT and reverse charge

What you supply, to whom and where

Three questions determine the VAT. Do you supply services or goods? Is your client a business or a private individual? Which country are they in? What follows describes the situation for a business client, because private individuals fall under separate rules. Goods and special services have exceptions, so check your situation on belastingdienst.nl or ask your accountant.

Preferably invoice foreign clients in a language they read, usually English. Show amounts in euros unless you agree otherwise, and state your IBAN and BIC alongside the payment term, because foreign banks often ask for them.

Services to a business in the EU

For most services to a business in another EU country, you shift the VAT to your client. You send the invoice without VAT and your client accounts for the VAT in their own country. This is called reverse charge (in Dutch: btw verlegd). On the invoice you then generally put:

• a statement that the VAT is reverse charged (btw verlegd)
• your VAT number and your client's
• no VAT amount and no VAT rate

Check beforehand that your client's VAT number is valid in VIES, the European Commission's validation system. If the number is invalid, the Dutch Tax Authority can afterwards charge the VAT to you. Keep proof of your check.

In your VAT return you report this turnover in box 3b. You generally also file an ICP return (intra-Community supplies), with the VAT number and the total amount per client. The amount in the ICP return has to match box 3b. The deadline for the ICP return generally equals that of the VAT return, but check the exact date with the Dutch Tax Authority.

Goods and private individuals

If you supply goods to a business in another EU country, an intra-Community supply at 0 per cent may apply. For that you need, among other things, a valid VAT number from the client and proof that the goods left the country. An ICP return goes with this as well.

If you sell to private individuals in other EU countries, different rules often apply, sometimes with VAT of the client's country. This guide assumes business clients, so we leave that situation out here. If in doubt, ask your accountant.

Clients outside the EU

If you export goods to a country outside the EU, you generally charge 0 per cent VAT. The 0 per cent rate has to be on the invoice. It is not an automatic right: you must be able to show that the goods were really exported, for example with a transport document and proof of export.

For services to a business outside the EU, the service is generally not taxed in the Netherlands, because the place of the service is with the client. You then charge no Dutch VAT. The statement on the invoice and the way of reporting differ per situation, so get advice before you send the first invoice.

An example with figures

An invented designer from Utrecht invoices 40 hours at € 60 to a German company with a valid VAT number:

• Design, 40 hours at € 60.00: € 2,400.00
• VAT: reverse charged, no VAT amount
• Total payable: € 2,400.00
• On the invoice: the wording btw verlegd (reverse charge), their own VAT number and the client's
• In the return: € 2,400 in box 3b, and in the ICP return against the client's VAT number

Had this client not had a valid VAT number, the ordinary treatment with Dutch VAT would generally have applied. That is a reason to check the number beforehand.

Common mistakes

• Reverse charging VAT without checking the client's VAT number.
• Forgetting the reverse-charge statement or one of the VAT numbers.
• Forgetting to file the ICP return.
• Charging 0 per cent on exports without proof of export.
• Assuming that every service abroad can go without VAT.
• Treating private clients abroad as business clients.

Checklist

• Is your client a business, and in which country are they?
• Do you supply a service or goods?
• Is the VAT number valid in VIES, and have you recorded that?
• Are the right statement and both VAT numbers on the invoice?
• Does the amount in box 3b match your ICP return?
• Do you have proof of export for exports?

More on the mandatory details is in the guide on what an invoice must contain. How to prepare your return is covered in the guide on the VAT return.

Frequently asked questions