What is BTW? Dutch VAT explained
6 min read
BTW (belasting over de toegevoegde waarde) is Dutch value added tax. You add it on top of your price, your client pays it, and you forward it to the Belastingdienst. It passes through your bank account but it is never part of your income.
The three rates
Which rate applies depends on what you sell, not on who you are.
- 21% — the general rate: consultancy, design, development, most goods and services.
- 9% — the reduced rate: food, books, medicines, hairdressing, passenger transport, some repairs.
- 0% or exempt — exports and intra-EU B2B supplies are 0%; care, education and some financial and insurance services are exempt, which also means you cannot reclaim input VAT on them.
Output VAT minus input VAT
Each quarter you add up the VAT you charged (output VAT) and subtract the VAT you paid on business purchases (voorbelasting, input VAT). You pay the difference. If you bought more than you sold — a big investment quarter, for example — the difference is refunded to you.
Input VAT is only deductible with a valid invoice in your records, and only for the business share. Buy a laptop you use 80% for work and you reclaim 80% of the VAT.
Selling abroad: reverse charge
For services to a business in another EU country you charge 0% and write "VAT reverse-charged" plus your client's VAT number on the invoice; the client accounts for the VAT locally. You then also file an ICP declaration listing those clients. Sales to consumers in other EU countries follow their local rate once you pass the EU-wide distance-selling threshold, usually reported through the One Stop Shop. Services to businesses outside the EU are generally outside Dutch VAT altogether.
The mistake that hurts most
Spending collected VAT. A freelancer invoicing €10,000 excluding VAT receives €12,100 and owes €2,100 within weeks. Move the VAT part to a separate account the day the payment lands and the quarterly return becomes a formality instead of a shock.