On 17 September 2019, the Dutch Ministry of Finance published the government’s tax proposals for 2020. This included two important proposals relating to VAT:
- A reclassification of the VAT rate for electronic publications;
- And the implementation into legislation of the EU’s ‘Quick Fixes’
Parliament will hear the proposals before the end of 2019 with the aim for the measures to come into effect by 1 January 2020.
Electronic publications are currently taxed at the standard VAT rate of 21% in the Netherlands. The Dutch Ministry of Finance have proposed to follow in the footsteps of many other EU Member States by aligning these rates with their printed counterparts. These are currently taxed at the reduced rate of VAT of 9%.
Therefore, the current reduced VAT rate of 9% that applies to print publications also would apply to the supply or lending of electronic publications, including:
- Magazines, and
- Subscriptions to databases and websites of, for example, those newspapers.
To qualify for the reduced rate, the electronic publications would need to be similar to traditional print publications. However, it would not be necessary for each electronic publication to have a print equivalent.
EU’s ‘Quick Fixes’
The Dutch Ministry of Finance has also introduced a legislative proposal to introduce simplifications to the cross-border supply of goods within the EU, also known as the “quick fixes.”
The ‘Quick Fixes’ aim to provide clarity, guidance and some simplifications to VAT treatment that should apply when EU supplies of goods take place. The quick fixes include:
- Simplification for call-off stock arrangements;
- Uniform criteria to simplify the VAT rules on ‘chain transactions’;
- Substantive conditions such as obtain and report a valid VAT identification number to exempt B2B intra-EU movements of goods; and
- A framework for documentary evidence to support the intra-EU movement of goods.
You can see our ‘Quick Guide to the Quick Fixes’ by signing up to our webinar here.
If any of the above changes affect your business, please contact one of our VAT experts to find out how we can assist you.