Sales Tax
Also called: value-addedtax(VAT) or value-added tax(VAT)
Sales tax or VAT is an indirect tax imposed on the supply of products and services. Because it is payable on purchases by consumers and non-VAT-registered establishments, it is effectively a tax on consumption.
The actual remittance to the government is made by the suppliers and producers. These are allowed to offset the VAT to be paid on their sales against the sales tax they have paid to their suppliers.
From the customer 's perspective, it is a tax on the purchase amount. From the perspective of manufacturers, distributors and sellers, sales tax is a tax on the value added by them within the business chain.
Turnover tax is levied in 136 countries, including almost all countries in Europe. The Dutch Turnover Tax Act was introduced in 1969.
VAT-high and VAT-low
Many countries, including the Netherlands, use two different percentages for sales tax. The VAT amount then depends in part on the type of product or service.
The high rate in the Netherlands is currently 21%, the low rate 6%. The low rate is mainly levied on primary necessities such as food, as well as books. The high rate covers basically all other products and services.
Low VAT rate guidelines sometimes lead to unusual differences. Because rabbits are eaten, rabbit feed is subject to the low VAT rate. However, because guinea pigs, for example, are not part of our food chain, guinea pig food must be subject to the high VAT rate.
Certain products and services are exempt from sales tax. These include education, medicine and property rental.
What is VAT-referred?
Sales tax must almost always be paid in the country where the products or services are delivered. When supplying to another European country, the customer is not charged VAT. On the invoice, the term "reverse charge VAT" indicates that the customer is responsible for remitting sales tax in their own country.
When supplying products outside Europe, this principle depends on the tax laws in the country concerned. When products and/or services are purchased in the Netherlands from abroad, the reverse applies: you, the customer, must declare the VAT to the tax authorities yourself.
