VAT: You’re familiar with it. We all pay it with every product we buy or service we procure. The abbreviation VAT stands for ‘Value Added Tax’. In the Netherlands we have different types of VAT rates. For example, the rate for health care is 0%, because it must be available to everyone. A VAT rate of 9% applies to food and medicines. Other goods are taxed at a VAT rate of 21%. So, depending on the products you sell, you pass on a percentage of 0%, 9% or 21% to your customers.
In this blog, we will tell you all about VAT and what it means for your shipments. As an online entrepreneur, you are obligated to charge VAT on the shipping costs. We answer the ten most frequently asked questions. And if you still have questions after reading this article, we are at your service. Let’s get started.
VAT on your shipments.
As a MyParcel customer, you pay 21% VAT on all shipments you send via our platform (with the exception of the digital stamps and shipments outside the EU and compensation for damages). You can think of shipments as products that you purchase, and you are obligated to pay VAT on them if the invoice charges VAT. This happens automatically when you pay your MyParcel invoice. In addition, when you pass shipping costs on to your customer, you are also selling ‘a shipment’, as it were. VAT must also be paid on this shipment, by your customer. It’s all quite complicated. That’s why we’ve listed the ten most frequently asked questions and their answers for you.
The top ten most frequently asked questions about VAT.
Why do private individuals not pay VAT and business customers do?
If you buy a shipping label from PostNL, you do not have to pay VAT on it. The Postal Act states that there is a VAT exemption for universal postal services, because these products are designed for consumers. MyParcel is a business platform and is therefore obligated to charge VAT on certain products and services. For example, you have to pay 21% VAT on the shipping costs of your MyParcel shipment. You can request a VAT refund from the tax authorities, unless you participate in the small business scheme (KOR-regeling).
Note: The rates at PostNL may differ from those at MyParcel. In many cases, shipping via MyParcel is more advantageous if you can get a VAT refund.
Do I have to pay VAT on all MyParcel products?
No. Digital stamps are exempt from VAT, as are world shipments. All our other products and services are subject to 21% VAT.
Why is the digital stamp exempt from VAT?
The digital stamp is a postage stamp, but in digital form. The postage stamp is part of the universal service within the Postal Act and is therefore exempt from VAT.
I sell products with the reduced VAT rate but have to pay the increased VAT rate with you. What do I charge the customer?
You charge the customer the same VAT rate as the goods on the invoice. If you sell products that fall under the low VAT rate of 9%, you also charge 9% VAT on the shipping costs.
I sell products with different VAT rates. What VAT rate should I charge my customer for shipping costs?
If you pass on shipping costs to the customer, you must charge VAT on them. For the shipping costs, you charge the same VAT rate as the other products on the invoice, which can be 0%, 9% or 21%. If you sell food, for example, then this falls under the 9% VAT rate and you therefore also charge 9% VAT on the shipping costs. If you sell clothing, this falls under the 21% VAT rate and you also charge 21% VAT on the shipping costs. If there are products with different VAT rates on the invoice, calculate the VAT on the shipping costs proportionately.
You sell a sports bag and water bottle worth €45.00 and various food items worth €15.00. The sports bag and water bottle fall under the increased VAT rate, on which 21% VAT is charged. The food falls under the reduced VAT rate, on which 9% VAT is charged. The total amount of this order is €60.00.
75% of the total amount falls under the high VAT rate and 25% of the order falls under low VAT rate. If the shipping costs are €6.00, you charge 21% VAT for 75% of the shipping costs and 9% for 25%. The VAT amount on the shipping costs is then €1.08 in total.
Don’t quite get this example yet? No problem. You can download the detailed calculation below!
I participate in the small business scheme (KOR-regeling) and cannot request a VAT refund. Due to this, your rates are higher than those of PostNL. Why should I choose MyParcel?
If you cannot request a VAT refund on the shipping costs, then the shipping rates with MyParcel can be more expensive than with PostNL. PostNL does not charge VAT in most cases, as it is exempt from VAT obligations by law. Still, sending via MyParcel can offer you many advantages. We work with graduated rates, for example, which means that the rate goes down quickly when the number of shipments you send increases. This means that shipping with MyParcel can still be cheaper. More information on the graduated rates can be found here. The MyParcel platform also offers much more than just parcel shipment. You can find more information about our integrated services here.
Can I request a refund for or deduct the VAT on shipping costs?
As a business owner, you pay shipping costs to the carrier. Because this is a business expense, it is deductible. You can deduct this VAT as input tax. The VAT is then deducted from the VAT you pay on your revenue. The MyParcel invoice will clearly show the VAT paid. If you participate in the small business scheme (KOR-regeling), it is unfortunately not possible to reclaim VAT.
Do I also have to pay VAT for foreign shipments?
When sending a parcel abroad, please follow the guidelines below.
- Are you sending a parcel to a private individual without a VAT number within the EU? Then you just use the Dutch VAT rate and also charge the VAT on the shipping costs as described above.
- Are you shipping to a business and are therefore liable for VAT within the EU? Then the VAT can be reversed. The recipient must then comply with the country’s VAT regulations. You don’t charge VAT on the shipping costs and put ‘VAT reverse charge’ on the invoice as well as the recipient’s VAT number.
- Are you sending a package outside the EU? Then you do not have to charge VAT. So you don’t charge VAT on the shipping costs either. The customs authorities in the destination country will do the post-clearance.
If you are in doubt about which guidelines to follow, visit the website of the Tax and Customs Administration for more information. Note: As a business owner (sender), you are responsible for checking your customer’s VAT number if you are shipping to an entity abroad that is subject to VAT.
I have a company located abroad and would like to reverse my VAT. Is this possible?
MyParcel can reverse the VAT for you. For this, you need a foreign address and a valid VAT number. We will check your details and confirm that they are correct. Your invoice will now read ‘VAT REVERSE CHARGE’ and no VAT will be charged. Please contact us about this.
Why do I receive my compensation excluding VAT in case of damage?
In case of damage, we will reimburse the purchase price of the damaged/missing goods if they meet the conditions. You will have already deducted the VAT when purchasing, so this will not be reimbursed.
As a business owner, you are therefore obligated to pay VAT on the shipping costs if the invoice charges VAT. However, you can deduct the VAT charged to you (by suppliers or shipping services such as MyParcel) in your VAT declaration. If have more questions or can’t find your question, take a look at the Chamber of Commerce website or contact us. We are happy to help!