VAT in Netherlands

[Esra]

Hi all,

I need some information on the VAT in Netherlands.

I want to have an online flower delivery website. If I establish the company in Netherlands, what will be the VAT rate of sending flowers to one of EU countries, i.e Spain?

What will be the VAT rate, when someone wants to send it to non- EU countries?

In this business model, customers will be individuals and flowers are sent by local florists. There will be no flow of goods between countries.

I appreciate all the help.

[absolutevat]

Hi Esra

The VAT liability will be dependent on the contractual obligations as well as the location of the goods at the time of dispatch and the customer. If goods are delivered in-country by a local florist (but are effectively sold to you first), you may have registration obligations in a number of countries.

Happy to discuss this further with you.

Thanks

Richard

[Esra]

Hello Richard,

Thank you for your reply. The local florists won't sell the flower to us, we will only act as intermediary company. Customers will shop via website and will pay to us. We will pay to the local florists and take commission fee. Based on the articles I have read, even if we set up the Company in Netherlands, we should charge the VAT rate of the customer's country. Also, I have read that if the customer is outside the EU, we do not charge VAT. Is that correct?

Thanks.

Esra.

[absolutevat]

Hi Esra

If you are acting as the intermediary and invoice the florist for commission, this will be a B2B supply of services. If your business customer is based within the EU you will not charge them any VAT and they will self-account under the reverse charge mechanism. Note, if they are established in the same EU member state as your business, you must charge local VAT.

You should ensure that it is contractually clear that you act as the intermediary in the transaction, not as principal.

Thanks

Richard

[Esra]

Hi Richard,

Thank you for your response.

To make it more tangible:
e.g.1: flowers are sent from a Spanish florist to a Spanish private consumer and the consumer is invoiced by our company established in Netherlands, then we should register for VAT in Spain in order to charge Spanish VAT. What will be the VAT rate for the end customer?

e.g. 2: flowers are sent from a Mexican florist to Mexican private consumer and again, the consumer is invoiced by our company established in Netherlands, we are exempted of VAT, right? Even if there is no flow of flowers between countries, Does is still count as export? what should be the VAT rate in this transaction?

Kind regards.

Esra.

[absolutevat]

Hi Esra

Yes, if you invoice in your own name, as principal, then a Spanish VAT registration is required, and VAT at 21% will be due.

In the second example, this would be a domestic supply of goods in Mexico, potentially subject to Mexican VAT, but the rules around non-established suppliers in Mexico are not straightforward.

Thanks

Richard