Dutch VAT Changes
The Dutch Government has confirmed changes to the value-added tax regime that will take effect from January 1, 2018.
First, rules will become more strict with regards to medicines' eligibility to the reduced VAT rate of six percent. Products not recognized as medicines will be subject to the standard rate of VAT of 21 percent, such as toothpaste, shampoo, and sunscreen, the Dutch Government said.
As announced in September 2016, the VAT Agricultural Scheme will be abolished from the new year. This had previously exempted those engaged in agriculture sector businesses from VAT but restricted their right to claim input tax credits. Businesses could opt out and few decided to remain in the scheme. From January 1, 2018, they will be subject to normal VAT rules.