Life Sciences Bit: Dutch VAT rate on several LS-products increased
A number of goods and services, listed in an annex to the Dutch VAT Act, qualify for the reduced VAT rate (instead of the regular VAT rate of currently 21%).
Among these goods and services are: qualifying medicines, first-aid type supplies such as bandages and qualifying medical aids such as medical vaporizers, intravenous-pumps and catheters. As of 1 January 2019 these supplies are taxed with 9% VAT instead of 6%.
In determining which rate applies, the date of the supply is leading. For supplies after 31 December 2018, whereby payment is received still in 2018 the 6% rate applies. In such cases it is not necessary to report and pay an additional 3% VAT in 2019. However, the exact amount and nature of the of the future supply of goods or services should be clearly specified.
By law, the supplier of the goods or services can charge the rise in VAT rate to its client. Any contractual agreement to the contrary should be considered null and void.
It goes without saying that this increase has a severe financial impact on stakeholders for which VAT is always a burden such as hospitals and insurance companies. Moreover, industry needs to prepare for adjusting ERP and invoicing systems to be sure to remain compliant after 1 January 2019.
Should you have any questions regarding the increased VAT rate, please do not hesitate to contact Patrick Vettenburg, Luca van Silfhout or your permanent Loyens & Loeff advisor.
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PatrickVettenburgSenior associate Tax adviser
Patrick Vettenburg, tax adviser, is a member of our Indirect Tax practice Group in our Rotterdam office with a focus on corporate VAT, audits and the VAT aspects of international trade of goods and services.T: +31 10 224 66 51 M: +31 6 13 06 82 79 E: email@example.com
Lucavan SilfhoutSenior associate Tax adviser
Luca is co-author of the book 'Building in the Netherlands’. This publication is intended to be a handy overview of the most important legal and tax facets of and for Dutch building and development practice.T: +31 20 578 52 92 M: +31 6 22 10 93 79 E: firstname.lastname@example.org