Dutch VAT invoicing update

On 8 May 2025, the Dutch State Secretary for Finance published a revised VAT Decree in the Staatscourant (Official Gazette No. 2025, 15981), replacing the previous 2014 version. The updated Decree No. 2025-115705 incorporates recent EU case law and addresses evolving administrative practices, particularly regarding digital payments, cross-border services, and VAT liability in cases of error or fraud.

Key Updates in the 2025 VAT Decree

1. Digital Transport Payments as Valid Invoices

In the context of public transport and taxi services, where physical tickets are often no longer issued due to digital payments (e.g., OV-chipkaart, contactless cards), the decree confirms that digital transaction overviews may serve as valid invoices.

To qualify, these overviews must include:

• Date of issue

• Name of the service provider

• Date of service

• Distance travelled

• VAT due, or the data from which it can be calculated (e.g., total fare including 9% VAT)

This update reflects the growing use of digital and app-based mobility services in the Netherlands and ensures these meet formal VAT documentation standards.

2. VAT Liability for Non-Entrepreneurs in Invoice Fraud Cases

The Decree implements the ECJ’s decision in Case C-442/22 (Fraude d’un employé), establishing that where a non-entrepreneur or rogue employee issues a false invoice with VAT, they may be held personally liable for the VAT, unless the actual taxable person (e.g., their employer) failed to exercise due diligence.

In short, VAT liability extends to any party who issues an invoice stating VAT without proper entitlement, reinforcing the importance of robust internal controls for invoice issuance.

3. Responsibility for Incorrect VAT Deductions

If a supplier issues an invoice with incorrectly charged VAT, and the customer deducts this VAT, both parties may be held liable.

The updated Decree outlines a clear expectation of customer due diligence:

• Purchasers must verify key supplier details (e.g., VAT registration, PE status) using public sources.

• If there are reasonable doubts, reliance on the supplier’s statements is insufficient.

• Where necessary, the purchaser should consult the tax inspector.

In cases of bad faith or willful negligence, any incorrectly deducted VAT will be assessed directly on the purchaser. This clarification underscores the Dutch tax authority’s view that VAT fraud or error cannot be offset by ignorance.

4. Extended Recovery Period for Distance Sales and Digital Services

For intra-EU distance sales and digital services, determining the correct VAT treatment depends on whether the €10,000 EU-wide threshold is exceeded.

In situations where Dutch VAT was mistakenly paid (instead of VAT in the correct Member State), and the foreign Member State imposes an additional VAT assessment outside the normal Dutch 5-year correction window, the new Decree permits an extended term for ex officio reduction.

This provision helps mitigate double taxation risks and ensures fair treatment in line with the cross-border nature of these services.

5. ICP Reporting Clarification for Small Business Recipients Without VAT Numbers

Where a business customer in another EU Member State qualifies for their local small business exemption schemeand lacks a VAT ID, the Dutch supplier cannot submit an ICP (intra-Community supply) statement.

To address this, the Decree confirms that suppliers should report such B2B services under section 1e (supplied services) of the Dutch VAT return. This aligns Dutch practice with EU VAT reporting limitations and simplifies compliance for affected businesses.

Practical Implications for Dutch Businesses

These updates reflect the Dutch government’s intention to:

• Align VAT practices with recent European Court of Justice (ECJ) rulings

• Facilitate the transition to digital invoicing and mobility payments

• Reinforce the responsibilities of both suppliers and purchasers in preventing VAT fraud

• Improve administrative fairness in cross-border VAT compliance

Dutch taxable persons should review their internal processes, especially around:

• Employee invoice permissions

• Supplier verification procedures

• Reporting for digital or cross-border B2B services

• Handling public transport-related transactions without physical documentation