Invoicing to a customer abroad
If you want to invoice a customer who is not based in the Netherlands, you usually have to do something special with your invoice and the VAT you charge. Exactly what you should do depends on several factors. Is it a consumer or a company with a VAT number? Is the customer located inside or outside the EU? In this article you can read what the rules are for invoicing to a customer abroad and how you can process this in Gekko.
Invoicing a foreign customer within the EU
If your customer is located within the EU, first determine whether it is a company with a foreign VAT number or a consumer abroad. In both cases you do not charge VAT on the invoice, but you do have to pay attention to which type of VAT you use: reverse charge VAT or 0% VAT.
Invoice a company within the EU
If it concerns a company with a VAT number, in most cases you have to reverse the VAT on the invoice. You do not charge VAT to the customer and thus indicate that the customer must declare the VAT in his or her own country.
This form of export is also known as intra-Community services. In Gekko we have a special report for intra-Community performance. You must provide the VAT numbers of the businesses you invoice to the Dutch Tax Authorities.
Billing a consumer within the EU
If it concerns a consumer without a VAT number, it is important to realize that you are not allowed to export abroad without restrictions. In the case of structural export, you charge the VAT of the other country and you also pay the VAT in the relevant country.
However, in the case of occasional exports, you can usually make use of the 'limited distance selling' scheme. You invoice with Dutch VAT and also state this VAT in your Dutch VAT return.
To avoid having to register for one delivery to another EU country, EU countries have agreed threshold amounts. If the amount you invoice remains below the threshold amount, you may charge Dutch VAT. Above that, you have to charge the VAT rate of the customer's country. This threshold amount differs per country (text is in Dutch).
You can read more about exporting to EU countries on the website of the Dutch Tax Authorities. Please visit the following page of the Dutch Tax Authorities for information about Reverse-charging VAT.
Doing business outside the EU
The VAT rules are more complicated for invoicing customers based outside the EU. The rules differ per country and it is a good idea to research these rules first when exporting to a certain country. It makes a difference whether you export goods or provide services to customers outside the EU.
Exporting goods to countries outside the EU
When you export goods to non-EU countries or store them in a customs warehouse, you charge 0% VAT. It does not matter whether you invoice an entrepreneur or a private individual.
It is important that you state the export in your VAT return. Namely, under category 3a in your VAT statement. You can read more about calculating VAT when exporting goods to non-EU countries on the website of the Tax Authorities.
Providing services to customers outside the EU
Do you provide services to customers outside the EU? Then it is important to know whether the service are taxed in the Netherlands or in the other country. In general, services to countries outside the EU are not subject to Dutch VAT. You do not charge VAT on the invoice and you therefore do not have to state this VAT in your VAT report.
If you want to know exactly which VAT to use, then you can use the calculating VAT page of the Dutch Tax Authorities. Specific rules apply to certain services, including:
- services related to real estate
- providing access to cultural, art, sport, science, entertainment or educational events
- rental of a means of transport for short periods
- passenger transport
- restaurant or catering services
See also the website of the Dutch Tax Authorities for exporting from the Netherlands to non-EU countries and for importing from non-EU countries to the Netherlands.
Difference between 0% VAT and VAT exempt
Please note, if you state the VAT in an invoice: 0% VAT is different from 'VAT exempt'. The website of the Dutch Tax Authorities explains which goods and services are exempt from VAT. Please also note that import duties may apply to the services/goods provided.
NB. Please note that Gekko can provide you feedback on tax questions, but you are always responsible for applying the rules correctly.