Dutch zero rate of VAT on intra-community deliveries of goods
he zero rate of VAT is surprisingly often applicable, especially when you run your business throughout the EU. Intra-community deliveries of goods are nonetheless tied to tax risks.
Conditions to qualify for zero-rated VAT
First of all, you should verify whether or not your business activities qualify for the zero-rated VAT. The zero-rate only applies to (1) the delivery of goods (2) to an entrepreneur, (3) transported (4) to another EU-member.
Second, if you indeed qualify, the invoice will be subject to the following conditions. It should always include the label ‘Intra-Community Delivery’ and the VAT number of your customer.
It is always wise to verify your client’s VAT number, as the 6% or 21% VAT rate should be charged when the request for this VAT number is still pending. The VAT amount can yet be credited, though, when the number is officially recognized.
Besides the guaranty of a correct invoice, you may avoid further risks by documenting all transfer credentials. As you have to justify your right to the zero rate of VAT, proof that the goods in question left the Netherlands is mandatory. Although Dutch law does not stipulate the nature of these documents, the following documents should secure you your right to zero-rated VAT.
Proof of transportation
The most effective way to prove that goods left the Netherlands, is the transport documentation itself. This includes all transport documents, for example, the CMR-letters a truck driver receives when he arrives at the delivery destination.
Proving that goods crossed Dutch borders becomes a lot harder when the customer collects the goods himself. Therefore, Dutch law levies the common VAT rate for unique or one time only collections. Only repeated collect transactions to a regular customer are zero-rated. This should be verified by a completely filled-in collection statement.
Moreover, all other papers verifying intra-community transport are also of importance to the Dutch tax authorities. It is thus best to keep the following documents at hand when filing VAT:
- Voucher or proof of payment from abroad;
- Invoice for the transport;
- Notes of the transport company and/or transport insurance;
- Track-and-trace credentials;
- Acknowledgement or receipt.
Not having your documentation in order, may prevent you from the zero-rate of VAT. Furthermore, justifying your entitlement to this rate afterwards, is significantly harder. Therefore, it is to your benefit to be well prepared and timely encounter the help of a professional if need be. We at DTS are happy to assist you.