Set up Dutch taxes in your Shopify store

This article will help you set taxes if your Shopify store is based in the Netherlands.

The most important difference when it comes to charging VAT in your store is whether your business is VAT-registered or not. We covered this topic in our Shopify VAT guide for selling to EU customers.

If your business is VAT-registered and you want to sell to both consumers (B2C) and business customers (B2B) in different countries of the European Union, you will need to set up your tax settings and tax rates properly.

• Tax settings
• Tax rates in the Netherlands and the EU
  • Selling physical goods in other EU countries
    • Selling within the “micro-business” threshold
    • Surpassing the “micro-business” threshold
    • Country-specific registration
  • Selling digital goods

To charge VAT to some customers and not to others, you may choose from two settings, depending on how you want to display product prices in your Shopify store.

If you are selling predominantly to consumers (B2C), you may prefer to display product prices as including VAT.

To display your product prices including VAT, but still allow your business customers to have VAT deducted at checkout:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Decide how tax is charged section, check the Include tax in prices.
3. Click Save to apply the changes.
4. Go to the Settings → Markets → Preferences page and switch the Include or exclude tax based on your customer's country toggle on.

In case your customers are mostly businesses (B2B), you can choose to have your product prices displayed as excluding VAT.

To display your product prices excluding VAT:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Decide how tax is charged section, uncheck the Include tax in prices.
3. Click Save to apply the changes.
4. Go to the Settings → Markets → Preferences page and switch the Include or exclude tax based on your customer's country toggle off.

As of November 2023, the general rate of VAT (BTW or Belasting toegevoegde waarde) in the Netherlands is 21%.

There is a reduced VAT rate of 9% that applies to products such as food and soft drinks, books, newspaper, some works of art, antiques, or transport charges.

In the EU, you need to charge different tax rates when selling physical and digital goods.

1. In your Shopify admin, go to the Settings → Taxes page.
2. In the Manage sales tax collection, click the European Union.
3. In the VAT Collection section, click on Collect VAT.
4. Enter your VAT registration number. If you have applied for a VAT registration number but don't have one yet, leave this field blank. You can update it later when you receive it.
5. Save your changes by clicking on the Collect VAT button.

Is your total revenue from sales from other EU countries less than €10,000 annually? If yes, you apply for a micro-business exemption and do not have to take any extra steps; you just include this revenue in your domestic VAT return.

When selling physical goods to customers in the European Union, simply charge your home country's VAT rate.

Do you ship your goods to consumers in different EU countries? If you store and dispatch your stock from your home country abroad, you need to charge the VAT rate of that country instead.

The good news is that from July 2021, you only need to submit a single EU VAT return in your home country.

As a B2C seller, you can use the EU One Stop Shop (OSS) VAT return, on which you declare all the VAT you collect from all the EU countries you sold to. Your domestic tax authority is then responsible for forwarding the collected taxes to the respective countries.

For example, if your business is based in the Netherlands, you apply the Dutch VAT rate of 21% applies to the orders from the Netherlands. For orders from different EU countries, you should charge the VAT rates applicable to the shipping destination country.

You also have the option to register for VAT in each EU country that you ship to. To add the local VAT registration number, follow the same steps as when adding your home country’s VAT registration number.

If you are unable to select the additional country you are VAT-registered in, you may need to create a shipping zone first. To create a shipping zone:

1. In your Shopify admin, go to the Settings → Shipping and delivery page.
2. In the Shipping section, click Create zone.
3. Type in the name of the shipping zone, add the country (or countries) you are VAT-registered in using the search bar, and when finished, click Done.
4. To make this zone available, add the shipping rates.
5. Save your changes.

There are special rules for selling digital goods from the Netherlands to other EU countries. But first, it is critical to understand what exactly digital services are.

Digital goods or services include radio and television broadcasting services, telecommunication services, and electronically supplied services, such as online magazines, music, films, and games.

Even though a company uses the internet to facilitate trading, this does not always mean that they provide e-services. For example, the sale of goods where the order and processing are done electronically (such as through a Shopify store) is not a supply of digital services. This is regarded as a sale of goods and follows the usual VAT rules set out above.

If you are making supplies of digital services from the Netherlands to customers in other EU countries, there is no registration threshold (such as the exemption for micro-businesses of €10,000).

Therefore, if you are selling to individuals or non-VAT registered businesses, you must submit the EU OSS VAT return or register for VAT in that country and charge its VAT rate to your customers there. The EU OSS scheme allows businesses to report the VAT due on services in their own country via a web portal.

If you are selling digital services to VAT-registered businesses, then they are responsible for any VAT due to the tax authorities in their country.

To learn more, please see this article to find out how to set up EU taxes for selling digital goods.

Once you set your tax rates correctly in your store, Sufio will automatically create valid invoices with an exact breakdown of the charged VAT.

You can create invoices in the customer's local language and include all the necessary details to make them compliant with invoicing legislation in the EU.

Issuing invoices with the correct tax breakdown is crucial for your bookkeeping and tax purposes.

If you are selling to businesses (B2B), Sufio invoices include all the required information, as well as VAT registration number (BTW or Belasting toegevoegde waarde) of your online store and your business customers.

Last updated on November 13, 2023.