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Netherlands: VAT “zero rate” seagoing vessels, changes in 2019

Netherlands: VAT “zero rate” seagoing vessels

The change to the value added tax (VAT) “zero rate” for the delivery and provisioning of seagoing vessels and the performance of services to seagoing vessels was announced in the 2018 Tax Plan and was originally intended to take effect on 1 January 2018. However, the change was postponed until 1 January 2019.


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The Deputy Minister of Finance recently published a new decree containing clarifications, and the measures in the new decree are effective 1 January 2019. 

What will change in 2019?

Currently, the VAT zero rate is linked to the ship qualifying as a seagoing vessel and for purposes of applying the VAT zero rate to the delivery, maintenance, and provisioning of such ships, the classification of ships used for customs purposes is followed. This does not require that these seagoing vessels must also be actually used for “navigation on the high seas.”

The European Commission addressed this treatment by the Netherlands, and the EC indicated that this provision was too broad. In response, the Netherlands has a legislative amendment that is to take effect on 1 January 2019. As of this date, the VAT zero rate for seagoing vessels will only apply if the following two cumulative conditions are met: 

  • The vessels are effectively used at least 70% for navigation on the high seas; and
  • The vessels are used entirely (100%) for commercial activities. The condition requiring supply to the operator of the ship has not changed. That condition will thus continue to apply in full. 


Read a November 2018 report prepared by the KPMG member firm in the Netherlands

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