VAT in the Netherlands

Will you be organising a conference in The Netherlands?

Make sure to be properly informed about tax consequences.

Getting experts in the field together, sharing ideas, creating policy... these are but a few good reasons to organise a conference. And it is no more than a logical option to choose the Netherlands as the preferred location for your conference. For the Netherlands do not only offer proper accessibility and infrastructure, but also a fine price-quality ratio for organising your conference.

Do you indeed intend to organise a conference, workshop, or convention in the Netherlands? In that case, it is important for you to be aware of the consequences in respect of taxes in the Netherlands. You should be aware that every entrepreneur who provides a service against compensation in the Netherlands is obliged to pay BTW (Dutch VAT), or 'turnover tax'. In this respect, it is irrelevant whether such entrepreneurs operate from the Netherlands or from a foreign country.

What is VAT?

VAT, Value Added Tax (Belasting Toegevoegde Waarde, BTW in Dutch), is a tax that is levied on the value added by an entrepreneur to a product or service. Every entrepreneur has to charge this BTW on its sales and remit it to the Dutch tax administration (Belastingdienst). In compensation, any BTW paid on costs incurred can be reclaimed.

As such, all added value of a product is taxed by BTW in each link of the trade chain. Eventually, BTW encumbers the final transaction, and it is charged on consumption of the product or service. Consequently, the consumer (either a private person or a company) finally has to pay the total BTW sum. The entrepreneur is the one collecting and remitting this type of tax.

The European Union was the first to introduce. Basically, a similar system applies throughout all EU countries, based on European Directives. As such, the basic rate in EU countries must be at least 15%, but the countries have various discretionary powers to give substance to the BTW system and, consequently, also to the rates. And, although BTW has meanwhile been introduced in most countries around the world, this type of tax is unknown to the United States, as yet.

When will you be liable to pay BTW?

All of those who deploy business activities against compensation in the Netherlands, such as organising a conference, workshop, or convention, are considered to be BTW entrepreneurs and are, therefore, liable to pay BTW. This applies just as well to foreign as to Dutch entrepreneurs. In order to find out in which country you are liable to pay BTW, the location of your performance and the substance of your performance are relevant.

Where will you be liable to pay BTW?

In order to answer the first question - where will your performance take place - it is relevant that services performed between companies (B-2-B services) are distinguished from services performed between companies and consumers (B-2-C services).  The principal rule is that B-2-B services are considered to take place at the customer’s location, in respect of BTW. For B-2-C services the principal rule is that these are deemed to take place at the site of the provider or supplier, in respect of BTW. Obviously, several exceptions apply to these principal rules.

For what services will you be liable to pay BTW?

With regard to the substance of your services, it is good to realize that organising a conference often includes providing various types of services. If it only pertains to providing access to a conference, you will pay taxes in the country where the conference will be held. If you are compensated for related services, such as organising hotel accommodation or catering activities, other rules may apply.

All of the various components must be identified and, subsequently, it must be assessed how these must be dealt with from a BTW perspective. Similarly, you must assess the costs you incur in respect of where they were incurred and whether you can reclaim any BTW paid on these. All in all, this is quite complicated; moreover since the interpretation of the rules may vary within the EU, and therefore you require proper and timely advice on these matters.

Foundations also pay BTW!

There is some confusion about whether foundations must also remit BTW when they organise a conference in the Netherlands. Since foundations often are not liable to pay all types of taxes (such as company tax), it is often believed that they are not liable to pay BTW either. However, as soon as foundation undertake activities that generate turnover, the foundation is understood to qualify as BTW entrepreneur and it will also be liable to pay BTW.

Request your BTW registration in time

When you, foreign entrepreneurs, organise a conference in the Netherlands, you are liable to pay BTW as a consequence, and you need to make sure you are registered in time at the Belastingdienst. Since organising a conference is often a lengthy procedure – in which costs precede any returns - it is imperative to register in time, so you can reclaim any BTW paid in time.

Another reason is that it will be difficult to assess BTW liability afterwards, when all costs have already been invoiced. Even more so, when BTW has been charged incorrectly but still paid, you will not be able to reclaim it later! In short, we advise you to register in time. And to always check whether any invoices your receive list the right level of BTW charged. In that way, you will be able to reclaim BTW paid in time!

Submitting BTW return

Once you have been registered at Belastingdienst, you need to file a BTW return periodically. A special department of the Belastingdienst will process all Dutch BTW matters of foreign entrepreneurs and they will explain to you how to submit a BTW return and pay BTW or reclaim any BTW paid. Moreover, you also have an option to submit a single BTW return when you organise a one-off conference.

Finally...

All in all, tax matters pertaining to organising a conference in the Netherlands are not simple. However, this applies likewise to any country within the EU, in all of which quite similar rules apply. The good news is that the tax administration in the Netherlands often operates pragmatically and efficiently, when compared to other EU countries. However, due to the multitude of rules, exceptions, and interpretations we would advise you to obtain expert advice at an early stage.

We wrote this article with support from Meijburg&Co Belasting-adviseurs (tax advisors). Meijburg&Co are part of KPMGs worldwide network. Obviously, they will be happy to assist you with regard to tax consequences of organising a conference in the Netherlands. 

Disclaimer:

The above article is provided by NBTC. (Netherlands Board of Tourism & Conventions). NBTC does not guarantee in any manner that the information provided is accurate or complete. No rights may be derived from the information in this article in any manner whatsoever, nor can NBTC be held liable for any damages suffered from using the information.