VAT, or Value Added Tax, is a mandatory component of the tax system in the Netherlands. Locally, it is called BTW – Belasting over de Toegevoegde Waarde, but in international contexts, it is most often referred to simply as “Dutch VAT.”

In principle, this tax applies to all commercial transactions – from the sale of goods to the provision of services, as well as imports. Its rules are partially harmonized within the European Union, but each country has its own set of rates and exemptions. It is worth familiarizing yourself with them, especially if you run a business, work with clients in the Netherlands, or regularly shop online from Dutch stores.

VAT Rates in the Netherlands in 2025

If you are wondering what the VAT rate is in the Netherlands, the answer is not particularly complicated, but it requires knowledge of three levels of taxation:

• Standard rate – 21%: applies to most goods and services available on the market.

• Reduced rate – 9%: applies to essential goods, such as food, books, medicines, transport services, and certain renovation services.

• 0% rate: mainly applies to exports (provided the necessary conditions are met).

In practice, buying a new laptop or perfume adds 21% VAT, while supermarket shopping or visiting a hairdresser may be subject to the lower rate. VAT also applies to services provided remotely, which is significant for the e-commerce and IT sectors.

In 2025, a legal amendment modifies the application of the 9% rate to certain agricultural products, and starting in 2026, an increase in the VAT rate on hotel services is planned.

When Can You Claim a VAT Exemption?

The fact that something is not subject to VAT does not automatically mean it has a 0% rate. In the Dutch tax system, certain sectors and activities are exempt from VAT. These include medical, educational, and childcare services – doctors, schools, and kindergartens do not charge VAT on their services but also cannot deduct VAT on purchases related to their operations.

Exemptions also cover financial and insurance services, residential rentals, and some non-profit organizations. However, it is important to note that the boundaries of these exemptions can be subtle – for example, renting a property for business purposes may already be taxable if the owner submits the appropriate declaration.

VAT in Practice – How It Works in Numbers

VAT in the Netherlands is generally applied to every sale of goods or services, but it is crucial to distinguish the parties involved. Retail consumers see the gross price – VAT is already included, with no further accounting required.

Entrepreneurs – both domestic and foreign – who conduct taxable sales must have a VAT number (BTW-nummer) and submit regular tax returns. The system is transparent enough that even small businesses can use a simplified program – the Kleineondernemersregeling – which either exempts them from VAT or significantly limits its scope.

Larger companies selling goods or services to the Netherlands from other EU countries should be familiar with the OSS (One Stop Shop) – a simplified VAT reporting system across the European Union.

Dutch VAT, Online Shopping, and International Sales

In the era of e-commerce, questions about the VAT rate in the Netherlands concern not only businesses but also consumers. When you purchase a product from a Dutch online store, VAT is applied at the Dutch rate – unless the store operates under the OSS system and applies the buyer’s local rate.

In practice, much depends on whether the EU distance-selling threshold of €10,000 per year is exceeded. Beyond this threshold, the seller must apply the VAT rate of the buyer’s country. For the consumer, this often matters little – the gross price is what counts – but for the seller, it is a significant logistical challenge.

For exports – both goods and certain services – the 0% rate applies, provided customs procedures are completed and documentation shows that the goods have left the EU. This benefits exporters because they do not have to charge VAT to the customer while still being able to deduct VAT paid on purchased components or materials.

Changes in the Dutch VAT System – Current and Upcoming

Since the beginning of 2025, changes have been implemented regarding the application of the 9% reduced rate. Some agricultural products – including certain seeds, crops, animal feed, and organic materials – were moved to the standard 21% rate. The government argues that this aims to simplify the system and eliminate tax privileges that lack social justification.

In practice, this results in price increases in specific sectors, particularly agriculture and floriculture.

For 2026, another wave of changes is planned. Accommodation services – hotels, guesthouses, and holiday homes – will be subject to the standard rate. Currently, they benefit from the 9% rate, which significantly lowers tourism costs in the country. After the change, customers will pay more, and businesses in the hospitality sector will need to adjust their pricing and sales strategies.

The Dutch government also considered extending the 21% rate to certain cultural, sports, and educational services, but these proposals were largely withdrawn after criticism. The final version of the VAT amendment for 2026 will be presented at the end of 2025 – it is worth monitoring, especially if you operate in any of the affected sectors.

Dutch VAT – Key Takeaways

Although VAT rates in the Netherlands appear straightforward, their practical application can be surprisingly nuanced. The standard 21% is just the starting point – exceptions, exemptions, and differences in international transactions are equally important.

If you conduct business in the Netherlands or trade with Dutch clients, it is essential to know the rules: who, when, and for what pays VAT, as well as what can be deducted and where the tax obligation lies.

For consumers, the most important point remains: in the Netherlands, store prices already include VAT, so there are no surprises at checkout. However, for online or business purchases, understanding the system can be advantageous. Dutch VAT affects not only the final price but also how accounting, pricing strategies, and cost management are conducted in a business.