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VAT rate increase from 19% to 21%: points to consider 

 

On October 1, 2012, the general VAT rate will increase from 19% to 21%. This increase is one of the measures included in the Act on the Implementation of Tax Measures Budget Agreement 2013. To summarize: the supply of a good or a service rendered before October 1, 2012, will continue to be taxed at the 19% VAT rate. It is irrelevant whether the VAT may only become due on or after October 1, 2012. The supply of a good or a service rendered on or after October 1, 2012, will be taxed at the 21% VAT rate. This also applies if advance payments were made on the basis of a 19% VAT rate.

Transitional rules allow for some exceptions to the above. Different rules will apply to real estate. Our memorandum addresses the points that need to be taken into consideration in respect of the VAT rate increase and the transitional rules. The following issues are discussed:

  • Charging the additional VAT owed
  • Continuous services
  • Other services that require some time
  • International trade
  • Reverse-charged VAT for sub-contracted work
  • Private use of goods and services
  • Real estate
  • The performing arts, art objects, and solar panels.