close
Share with your friends

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.

1000

Related content

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

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal