Why Do I Have to Pay VAT as a Dutch Company?

A common question is why VAT isn’t automatically shifted or deducted during checkout. The reason for this is based on Dutch tax law:

Domestic delivery Since Celtic WebMerchant is a Dutch company, all deliveries to other Dutch businesses are considered ‘domestic deliveries’. According to the rules of the Dutch Tax Authority, it is mandatory to charge the applicable VAT rate (usually 21%) for domestic transactions.

How do you handle this in your accounting? Although you pay VAT to us, this is not an extra expense for your business:

• Input tax: You can reclaim the paid VAT as ‘input tax’ in your regular VAT return, just like usual.
• Official VAT invoice: Use the official invoice, which you can download from your account under ‘VAT invoices’. This invoice clearly lists all amounts and the VAT identification number of Celtic WebMerchant.

When is VAT shifted? VAT is only shifted directly (0% rate) in the case of an ‘intra-community supply’. This only applies if a company is based outside the Netherlands but within the EU (for example, a Belgian or German company) and has a valid foreign VAT identification number.