When selling to individual or entrepreneurs in the country itself, the tax rate of that country is applied. When selling to entrepreneurs a VAT numbers given at the point of purchase. This VAT number along with other company information is noticed at the invoice. With this invoice the buyer (entrepreneur) can recover the VAT charges when doing taxes.
Example: Selling a product in The Netherlands (EU) to an individual: product price + 21% VAT Example: Selling a product in The Netherlands (EU) to an entrepreneur: product price + 21% VAT (can be recovered later)
If products are sold to a another European Union Country, the tax rate of country of export is applied. This only applies for individual.
Example: Selling a product from The Netherlands (EU) to Belgium (EU) to an individual: product price + 21% VAT (VAT of Netherlands / export country)
Described above, you can recover charged VAT for sold goods if you are an entrepreneur later on. However if you buy goods from outside the country but still within the European Union you do not have to pay the default tax rate but the tax rate 0%. Therefore you need to provide your VAT number along with other company information at the point of purchase. Notice that you have a tax rate but the tax rate is 0%.
Example: Selling a product from The Netherlands (EU) to Belgium (EU) to an entrepreneur: product price + 0% VAT (0% VAT is still a VAT!)
If you export great value to individuals in EU countries, it could be that the seller has to register in that country. Every country has its own threshold. For example Belgium has a limit of 35.000 euro. If a seller wants to sell more than 35.000 euro to individuals in Belgium it has to register its company there. The threshold differs per EU country.
![VAT rates] (http://puu.sh/omHB6/b5a69129a0.png)
The export to non European countries (like Switzerland or US) have the tax rate of 0%. It makes no difference whether the goods are supplied to a private individual or an entrepreneur. For example export from the Netherlands (EU) to Switzerland (non EU) has zero tax rate policy. In most cases the receiver of the goods will have to pay import charges. But the seller / exporter doesn't have to do anything with this.
Example: Selling a product from The Netherlands (EU) to Switzerland (or US) to an entrepreneur: product price + 0% VAT Example: Selling a product from The Netherlands (EU) to Switzerland (or US) to an individual: product price + 0% VAT
Sales tax is levied on the sale of a good to its final end user and is charged every time that item is sold retail. Sales to businesses that later resell the goods are not charged with tax. These businesses have a "resale certificate" and have to show this certificate (or its ID number) along with a statement that the item is for resale at the point of purchase. This last looks a little bit like a VAT number in the European Union.
The main difference between VAT (European Union) and Sales Tax (US) is that Sales Tax is only levied once at the point of purchase to the end user and the VAT is levied every time (even if it's sold to a reseller). (As a company / reseller you can recover this VAT after doing tax declarations.)
| Origin | Destination | Legal form | Tax Rate |
|---|---|---|---|
| The Netherlands (EU) | The Netherlands (EU) | individual | 21% |
| The Netherlands (EU) | The Netherlands (EU) | entrepreneur | 21% |
| The Netherlands (EU) | The Germany (EU) | individual | 21% |
| The Netherlands (EU) | The Germany (EU) | entrepreneur | 0% |
| The Netherlands (EU) | Switzerland (NON EU) | individual | 0% |
| The Netherlands (EU) | Switzerland (NON EU) | entrepreneur | 0% |
| US | US | individual | (differs per state) |
| US | US | reseller | 0% |
- http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf
- http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/business/vat/vat_in_the_netherlands/vat_relating_to_purchase_and_sale_of_goods/export_from_the_netherlands_to_non-eu_countries
- http://www.webshoprecht.nl/NLTexte/Omzetbelasting%20verkopen%20NL-DE.pdf
- http://www.mkbservicedesk.nl/2212/ik-met-mijn-webwinkel-producten.htm
- https://en.wikipedia.org/wiki/Sales_tax
- https://nl.wikipedia.org/wiki/Verkoopbelasting