If you've just registered a business in the Netherlands, working out how to calculate VAT in the Netherlands usually comes up the first time you write an invoice, and again a few months later when your first VAT return is due. Those are two different sums: one is a quick multiplication on a single invoice, the other adds up everything you charged and everything you paid over a whole quarter. Both are covered below, with the current rates and a worked example.
Dutch VAT rates at a glance
| Rate | Applies to | Examples |
|---|---|---|
| 21% (standard rate) | Most goods and services | Consulting, IT services, most webshop products |
| 9% (reduced rate) | Everyday essentials and a short list of specific services | Groceries, books, hairdressing |
| 0% | Cross-border trade under strict conditions | Exports outside the EU, certain intra-EU supplies |
| Exempt | No VAT charged, and no right to deduct VAT either | Healthcare by BIG-registered professionals, education, the small businesses scheme (KOR) |
Picking the wrong rate is one of the more common mistakes we see, especially from founders coming from a country with a single flat VAT or sales tax rate. The 21%/9% split isn't always intuitive, and a wrong rate on an invoice usually means a correction later.
"Exempt" is not the same thing as the 0% rate
Being VAT-exempt means you don't charge your client any VAT at all, which is the case for healthcare provided by BIG-registered professionals and for education. That sounds like a win, but it cuts both ways: you also lose the right to reclaim VAT on the costs tied to that exempt revenue. The 0% rate, used for exports outside the EU, works differently: you still file a return as normal, and you keep your right to deduct input VAT, only the rate charged happens to be zero. That's why a physiotherapist or a teacher typically ends up in a different input-VAT position than a webshop selling internationally.
The formula behind calculating VAT
- Excluding VAT to including VAT: amount × (1 + rate). At the standard rate, that's amount × 1.21.
- Including VAT to excluding VAT: amount ÷ (1 + rate). At the standard rate, that's amount ÷ 1.21.
- Just the VAT amount, from an inclusive figure: amount − (amount ÷ 1.21), or more directly, amount × (21 ÷ 121).
A worked example with real numbers
Say you invoice a Dutch client €800 excluding VAT, at the standard rate.
- VAT amount: €800 × 21% = €168
- Total on the invoice, including VAT: €800 + €168 = €968
If instead you're handed a figure of €968 that already includes VAT and need to work backward, divide by 1.21: €968 ÷ 1.21 = €800 excluding VAT, and the difference, €168, is the VAT portion.
Why your VAT return is a separate calculation
A single invoice only tells you half the story. Your VAT return looks at two running totals over the whole filing period:
- The VAT you charged clients, shown on your sales invoices (output VAT).
- The VAT you paid to other businesses on your own costs, known as input VAT.
If the first number is higher, you pay the difference to the Belastingdienst (the Dutch tax authority). If the second is higher, for example after a large business purchase, you get money back. Missing deductible input VAT is one of the costlier mistakes we see from new clients: VAT you were entitled to reclaim on business expenses just sits there unused instead.
When one invoice, or one business, mixes VAT rates
Sell something taxed at 21% and something else taxed at 9% on the same invoice, say a webshop carrying both electronics and groceries? You calculate VAT per line, at whichever rate that specific item carries, and only add the totals together afterward. There's no single blended rate you can apply across the whole invoice, even though that would be the simpler sum.
A second, trickier version of mixed VAT shows up at the business level: if your company has both VAT-exempt revenue (healthcare, say) and VAT-taxed revenue (retail sales of equipment, for instance) side by side, you can't fully deduct the input VAT on your general costs. Instead, you split it in proportion to your taxed versus exempt turnover. That apportionment is one of the harder parts of a VAT return to get right without help, and exactly where manual bookkeeping tends to go wrong.
Frequently asked questions
Do I need to calculate VAT even if my revenue is low? Yes, as long as you hold a valid VAT number and don't fall under the small businesses scheme (KOR). Even in a quiet quarter with nothing to report, you still file a nil return on time.
What if I used the wrong VAT rate by mistake? You correct it in a later return, or through a separate supplementary filing if the amount is significant. The sooner you catch it, the smaller the correction usually turns out to be.
Does VAT apply to shipping costs or discounts too? Shipping is taxed at the same rate as the product you're shipping. A discount gets subtracted from the amount first, and VAT is then calculated on what's left.
Setting up a business in the Netherlands as an expat founder?
Dutch VAT is one of the first things that trips up founders moving their business here, since the rate structure and the filing rhythm rarely match what you're used to elsewhere. At Sophy &Co. we help expat entrepreneurs work through exactly this, often starting before the company is even registered, and can put you in touch with our network of trusted partners: banks, lawyers, notaries, and other expats who've set this up before.
We're a multilingual team (English, Dutch, Italian, Chinese, Spanish, Papiamento, German, plus some French and Polish), woman-led, and proudly LGBTQIA-friendly, so book a call and explain your situation in whichever language is easiest.
Not sure which rate applies to you, or whether the KOR is worth it?
At Sophy &Co. you don't have to work this out alone. Share your purchase and sales invoices with us and we'll make sure every rate is correct, from the invoice to the final return, for a fixed monthly fee with no surprises. Check whether the small businesses scheme could exempt you from VAT entirely with our KOR checker, or read more about filing a VAT return in the Netherlands.
Take a look at our services and pricing, or get in touch for a no-obligation conversation.
Learn more
For the official rates and exemptions, see the Dutch Tax and Customs Administration's overview of VAT rates (in Dutch) or the Netherlands Chamber of Commerce's guide to VAT for entrepreneurs.