Changes to E-Commerce VAT Rules and Dutch Import Regulations in the EU
For entrepreneurs managing or planning to establish a Dutch e-commerce company, staying compliant with current regulations is essential for sustainable business operations. While the Netherlands offers significant opportunities for profitable business ventures, compliance with local laws and regulations remains a fundamental requirement. At Intercompany Solutions, we combine our expertise in Dutch company establishment with comprehensive support services, including legal and financial guidance for foreign entrepreneurs.
Our commitment extends beyond initial setup – we ensure your Dutch business operates within all regulatory frameworks while maximizing its growth potential. When trading from the Netherlands, specific import regulations apply for goods entering from non-EU countries. This article provides detailed insights into recent changes in Dutch e-commerce VAT rules and import regulations that may impact your current or planned business operations. For entrepreneurs seeking personalized guidance on how these changes affect their specific business situation, we encourage you to request a free consultation for a comprehensive consultation.
Why start an e-commerce business in the Netherlands?
Starting an international trade company has never been easier. Since the rise of digitalization and internet, regular boundaries have made way for open trade possibilities around the globe. As a bonus, the Netherlands has always been at the forefront of trade, which has also been stimulated due to the strategical position of the country. The port of Rotterdam is one of the main hubs that allows for the import and export of goods for the entirety of Europe. If you choose to settle your new business here, you will profit from the attractive position and fantastic physical infrastructure the country has to offer. But that is definitely not all.
The Netherlands is also known for its bilingual population, in many cases even trilingual. It is very easy to find qualified personnel in the country, or adequate freelancers who can take up some of the burdens of your Dutch company. The Netherlands is continually listed in the top 5 of many prestigious business indexes, scoring high on innovation, competitiveness and overall performance. Furthermore, the political and economic climate are very stable and provide a solid base for your business endeavors. All in all, if you are ambitious and are willing to put in some work, you are sure to achieve an acceptable level of success doing business from the Netherlands.
The benefits of international trade
International trade has been at the forefront of our current civilization throughout the centuries. Without international trade, we would still live with limited means and not be able to share our knowledge and expertise with other countries. Since the rise of the internet, international trade has made a massive spurt forward. Huge international corporations such as Amazon and eBay have already profited from this development. If you are currently residing in a country that makes it difficult to access the European and/or international market, investing in a physical company in the Netherlands can provide you with the gateway you need to expand your business activities.
If you are adept at providing international customers with exactly what they currently need, and can stay on top of modern developments, you should definitely consider a business in international trade. Of course, there are numerous rules and regulations you will need to adhere to when doing business from the Netherlands internationally. Therefore, in this article, we will explain in detail how to deal with Dutch import regulations and recent VAT rules. That way, you will know how to conduct business appropriately. So read on to know more about these technicalities.
Doing business from the EU with an e-commerce business
Online shopping is increasing in all countries all over the world. Did you know, that by now more than a quarter of the world's population shops across borders? This is mainly due to lower prices or a wider choice of products that attract customers to international webshops. This offers splendid cross-border opportunities for your webshop. But always note, that if you start e-commerce outside the EU, you will encounter different rules and laws, as we already briefly discussed above. Dutch import regulations might differ significantly from the regulations in your country of residence. It is important, however, to always adhere to the rules and regulations to be able to function properly as a business.
For example, requirements for a webshop differ per country. This can entail factors such as the security of your website and the protection of your customer's privacy, but also the way you pay taxes and customs duties. Within the European Union (EU), the rules are usually the same for all member countries. Outside the EU, the rules and requirements are regularly different for each country. This makes trading within the EU much easier, but you will have to get acquainted with the rules before you start your business. One way to let your customers know to which rules and regulations you and them must adhere, is to provide a translation and explanation of your terms and conditions on your website. And thus avoid a legal disagreement. We will now further elaborate on import duties, when you import goods to the EU from non-EU member countries.
Paying import duties
Whenever you need to import products, raw materials or goods from a country outside the EU, you generally will have to pay import duties. Import duty is a certain tax that you have to pay to Dutch customs when importing goods, which is highly dependent on the type of goods you are importing. You will have to file an import declaration with the Customs Administration of the Netherlands. The moment you import goods, you need to declare these goods at Dutch Customs. This is done because you are bringing non-EU goods into the EU marketplace and this needs to be registered at all times. The declaration itself can be performed electronically in almost all cases and is generally handled by your courier, shipping company or customs-expediter. Of course, you are also free to file the declaration yourself, you can contact the National Helpdesk of Dutch Customs to help you out with this.
Keep in mind, that you need an EORI number to be able to do this. To be able to know how much you will need to pay exactly, you will have to do a bit of research, as the percentages of import duties for certain goods are different from others. Additionally, you actually won’t have to pay any import duties for some products or goods. You also pay less or no import duties at all, when you import from a country that is an EU member state, especially if there’s a trade agreement between the Netherlands and that specific country. Below, we will outline how you can calculate the amount of import duties you will have to pay for certain goods and products. WE will list the rates of import duties and provide a sample calculation for your convenience. This way, you can calculate for yourself what you will pay in import duties.
Calculating import duties
If you import products from outside the EU, then you pay import duties, as we already discussed above. You probably want to know how much this will cost you, in order to prepare a rough cost estimate when importing goods. You can actually calculate this quite easily yourself, once you understand how the technicalities work. To be able to do this, you first need the customs value of your products. This is essentially the value of the imported goods at the EU's external border. So this entails the price you pay for the goods, plus the transport and insurance costs up to the border or port of entry into the EU.
Do note, that in certain cases, you can add or subtract certain costs to the customs value. Next to that, there are also products where you calculate the import duties on the quantity instead of the value. With wine, for example, you pay import duties per every hectoliter you import into the Netherlands. So in essence, how much import duty you pay differs a lot per product. In the table below, you can find the rates for most generally used product groups. You will need to know that within a product group, the rates often can differ as well. For example, within the product group ‘laptops’ for electronic computer devices, you pay no import duties (0%). Whilst at the same time, for certain clothing items, the rate can rise as high as up to 12%.
| Product category | Import duty rate |
|---|---|
| Furniture | 0% to 5.6% |
| Clothing | 0% to 12% |
| Toy | 0% to 4.7% |
| Footwear | 3.5% to 17% |
| Jewelry | 0% to 4% |
| Laptops and tablets | 0% |
| Telephones | 0% |
| Books, CDs and DVDs | 0% |
Once you know the exact customs value of your entire import shipment, you will be able to calculate the amount of import duties you will need to pay at customs. We have provided an example below that shows how this calculation works in detail. In the example below you can see how that works. In this case, we are importing 30,000 pieces of cocktail glasses from Taiwan. For these products, the current import duty rate is 11%. Please note, that you can look up the percentage of import duties for your products in different systems. We will explain this below the calculation example.
Example
30,000 pieces of cocktail drink glasses from Taiwan 8,500 euros
Transportation and insurance costs from Taiwan, place of entry EU: 1,500 euros
Customs value: 10,000 euros
The import duties to be paid are 11% of the customs value: 1,100 euros
Find the right TARIC code to calculate import duties
When you want to import a product to the Netherlands from another country, you will need to use a ten-digit commodity code. In the EU, this ten-digit code is also known as a ‘TARIC code’, which is a special code when importing goods. The TARIC code of your product determines the exact rate of the import duties you will need to pay. This code must also be included in your import declaration. This way, customs will know how much import duties you have to pay and the process will go smoothly and as planned.
It is very important that you choose the right TARIC code, because the import duty rate might not be correct when you choose a wrong TARIC code. This can lead to incorrect paid amounts, which can cause problems for you with the Dutch authorities. So always make sure that you pick the right TARIC code. If you are ever unsure whether the TARIC code you are using is correct, you can apply for a so-called ‘Binding Tariff Information’ (BTI) statement from Dutch Customs. This is a written statement that is binding regarding the TARIC code for the products and goods you wish to import, which you can use as proof. Please be informed that any verbal information regarding TARIC codes, even when obtained via Customs or an official advisor, is not seen as valid proof.
The Container Release Message (CVB) and customs tariff (DTV)
When you import goods from outside the EU, you should take into account that such goods always need to be accompanied by a Container Release Message, which in Dutch is named “Container Vrijgave Bericht” (CVB). This applies to all imported goods. It doesn’t matter whether they are transported in a container, in a trailer, in bulk, or as general cargo. Essentially, by pre-clearing the items you are importing, you are speeding up the logistics chain which is beneficial for all parties involved. Next to that, upon declaring your goods, you will need to use the customs tariff (DTV) for your product codes. Dutch Customs will ask you for the correct product codes when you are preparing the declaration, which, for example, can be the relevant HS code. As discussed before, the total amount of import duties you have to pay depends on the product code and the country from which you import. In the Tariff (DTV), you will find the following information per product code:
- A clear and concise description of the goods
- The total amount of import duties
- Other taxes you need to pay upon import
- Other important rules for import
When are you exempt from paying import duties?
There is an exception when paying import duties as an importer of goods from outside the EU. When the total value of your shipment doesn’t exceed the amount of €150, you do not have to pay import duties under the Import Scheme. Please note, that this total amount does not include any transport costs and possible insurance costs. Furthermore, this exemption does not apply when importing specific goods such as alcoholic beverages and products, tobacco and tobacco products and perfume and eau de toilette. You will always be obligated to pay import duties for these products, even for shipments that don’t total €150.
Essentially, the exact amount of import duties you will have to pay depends on the type of product, and the country you are importing from. Next to the import scheme, you can sometimes be eligible for a reduction or even an exemption from import duties. If the country where you buy your products currently has a trade agreement with the EU, you might be eligible for a reduction when you provide a certificate of origin for the products you import. Another example is when you import certain raw materials or semi-manufactured products that are in short supply in the Netherlands or EU. This might make you eligible for a tariff suspension or a tariff quota.
Furthermore, you may be exempt from paying import duties when the client you sent the goods to returns these within a timeframe of 3 years. The products should be in the exact same state as when they received the goods. You will then not be obligated to pay import duties on the re-introduction of the goods into the EU. Additionally, you never pay any import duties when you import goods from a country within the EU, due to the free movement of goods in the entire EU. So it might be profitable to import goods from an EU country when you start a trading company in the Netherlands. We strongly advise to do research on this topic, as importing goods from within the EU might save you a lot of money.
Import VAT costs
Please be aware of the fact that there is a difference between import duties and import VAT. In addition to paying import duties, you generally also have to pay import VAT on many goods and products. Next to that, you have to take into account other import costs, such as filling in the import declaration, transporting goods, unloading and possibly storing goods in the destination of arrival. All these different costs combined are also known as customs clearance costs. If you have any doubts about the exact amount of these costs, your freight or logistics service provider should be able to tell you more about this.
If you are an e-commerce entrepreneur, and you deliver products or goods from outside the EU to customers and clients within the EU, then you are probably already acquainted with the new VAT rules that came into effect since the 1st of July 2021. The previous VAT exemption for the import of goods with a maximum value of €22 has expired since then. However, if your shipment with a value up to €150 is exempt from customs duties under Article 23 or 25 of Regulation (EU) 1186/2009, then you need to file an import declaration in the country of destination of the goods and pay the import VAT there, unless you opt for the 'Import Scheme'.
If you are selling goods from outside the EU to clients who do not file a VAT return, then you must declare this VAT in the EU country where the goods are going, which is the country in which your customer lives. For example, if you deliver products from Taiwan directly to private consumers in France via your online store, or goods from Indonesia to a customer in Poland. If you want to use the Import Scheme, you will need to register in advance to be able to do so. This is possible through the Dutch Tax Authorities, by using the ‘One Stop Shop’ system, which is a simplified way to import goods under the scheme.
Registration for this scheme has been open since April 2021. Once you have found the appropriate website, you can choose the ‘Registration’ option and then 'Request registration for a one-stop-shop'. You then need to fill out the form. When you are choosing this option, then you need to register in the country where your company or your representative is located. Also, when you use ‘Import Control’, you will be given an Import Control Number. You then use this number when you submit a ‘DECO’ declaration to Dutch Customs. You can read more about this on the page about filing a declaration with Customs on the website of Dutch Customs.
How to use the Dutch import scheme
The Dutch Import Scheme is used when you are an entrepreneur who is involved in distance sales. Whether you qualify, depends on the following criteria and conditions that you must meet:
- You deliver goods from outside the EU to consumers in another EU country. It doesn’t matter which EU country, the most important criterion is that the customer is based in one of the official member states of the EU.
- You also deliver directly to EU based consumers who do not have to file a VAT return. This means, that these are all private individuals.
- The Import Scheme is available only for shipments up to €150. If there are any insurance and shipping costs on the invoice, then these will not be included in the total amount. Also note, that a shipment can consist of a package with different goods, the most important thing is the total sum of the package. For such a shipment, you use only one transport document, an air waybill, for example.
- You cannot use this scheme for 'excise goods', as we already described above. These include alcoholic products, perfume and eau de toilette and tobacco products.
- You also cannot use this scheme for any type of restricted goods, such as meat products, or prohibited goods such as ivory.
- You need to be able to take care of the shipping of your products yourself, or via a trusted shipping or transport partner of your choosing.
When you are using the Import Scheme, you need to report the VAT for all these goods every month and pay it every month too. In short; if you use the Import Scheme, you do not pay VAT on imports that fall under this scheme. If you are not allowed to use the Import Scheme, for example, because the value of your shipment is higher than €150, then you pay the VAT in the country where you import your shipment as usual.
What should customs brokers, postal and courier companies do?
Do you currently own a courier or freight company that ships goods overseas, or do you handle customs affairs for other companies? If you are filing a tax return for a customer who has opted for the Import Scheme and if your customer uses Import Control, then they will be given an import control number. Afterwards, you will have to use this number when you submit an import declaration to Dutch Customs, because you must include this number in your dataset for the application DECO.
In the case that your customer is not opting for the Import Scheme, you can choose the so-called 'Special Package'. This entails that you submit an import declaration for every separate shipment and the client has to pay the VAT to Dutch Customs every month, as we already discussed earlier in the article briefly. Please note, that you will not have to register separately with the Tax and Customs Administration for this scheme. In the case that a customer doesn’t pay the VAT, such as when they decide to refuse the shipment, you can reclaim the VAT from the Tax Authorities or Customs of the country where the shipment went, under certain conditions. Also note, that for the customs declaration, you will need 'Electronic Messaging Registration'.
How can you set up an e-commerce company in the Netherlands?
Setting up a company abroad is now easier than ever, mainly because you can handle everything online and there is no necessity for you to physically be somewhere anymore. If you choose to incorporate a Dutch business with the assistance of Intercompany Solutions, the entire process can be handled remotely. You will need to provide us with some general information and documents, such as the following basics:
- A list of all the future company owners/directors
- Copies of a valid form of identification of you and any possible business partners
- A preferred company name, which we will check for you
- A valid business registration address in the Netherlands
Once we have all this information, we can proceed and incorporate the company with a Dutch notary public, provided that you choose to establish a Dutch BV or NV. If you choose one of the unincorporated business types, such as the sole proprietorship, you can skip this step because we can register your company at the Dutch Chamber of Commerce directly. In general, 99% of all foreign investors and entrepreneurs chooses the Dutch BV though, due to its many financial and tax benefits and additionally, the limited liability you will enjoy for any debts you might create with the business.
Once the notary has incorporated your company, you proceed by paying the required share capital. If you don’t have a Dutch bank account yet at this point, you can deposit the amount to the notary’s bank account. Once this is done, we can go to the Dutch Chamber of Commerce and officially register your company, after which you will receive your registration number and a Dutch VAT number. Once you also open a Dutch bank account, you can start doing business immediately. This process generally takes up only a few business days, depending on the nature of the business you want to establish and the complexity of your request. Feel free to contact us beforehand for a clear quote and more information about the process.
The many services we can offer you
Intercompany Solutions has assisted hundreds of foreign entrepreneurs from over 50 different nationalities. Our clients range from small one-person startups to multinational corporations, and everything in between. Our processes are aimed at foreign entrepreneurs and, as such, we know the most practical ways to assist with your company registration. We can assist with the full package of company registration in the Netherlands:
- Company establishment in the Netherlands
- Opening of a local bank account
- Application for VAT or EORI number
- Application for a variety of permits
- Application for a visa or start-up permit
- Startup assistance
- Financial services
- Administrative services
- Secretarial services
- Legal assistance
- Tax and financial services
- Media
- General business advice
We are constantly improving our quality standards to continually deliver impeccable services.
Intercompany Solutions can assist you with your Dutch e-commerce business
Would you like to do business within the EU and profit from the European Single Market, that lets you trade goods and services freely in all EU member states? Then we highly advise you to consider starting a Dutch business. We have many years of extensive experience in the incorporation, establishment and registration of a wide variety of Dutch companies, ranging from small startups to large well-known multinationals. We can also assist you with many other related services, such as the opening of a bank account, tax services, financial and legal advice, business advice and assistance, such as creating a business plan for you, administrative and secretarial services and many more interesting services on request.
We can handle the entire procedure in just a few business days for you, making it possible to kickstart your company in a very small timeframe. This can be especially practical when you would like to launch a new product off the market, or offer a new variety of an already existing product.
Feel free to request a free consultation anytime with any questions you might have regarding Dutch import regulations, starting an e-commerce company and doing business in the Netherlands in general. We are always happy to assist you in any way we can.
Sources
https://www.kvk.nl/internationaal/wanneer-moet-je-invoerrechten-betalen-en-hoeveel/
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