June 5, 2023

VAT on cross-border transportation 

Brexit has significantly impacted cross-border transportation for business entities and logistic forwarders in the EU. It is crucial to understand how to handle VAT to ensure compliance, especially for shipments between EU Member states and third countries like the UK.

According to Article 146 (1)(a) of the VAT Directive, goods delivered from the EU to a customer outside of the EU on behalf of the seller are charged with 0% VAT. This is because the goods have already been dispatched to a third country outside of the EU, so VAT should be charged at the destination of the goods. Additionally, Article 146(1)(e) states that transportation services directly connected to the exportation of goods are exempt from VAT. Since cross-border transportation carries goods to destinations outside the EU on behalf of the seller, it qualifies for this exemption, resulting in 0% VAT.  

In contrast, when goods are imported to the Netherlands from a location outside the EU, they are always charged 21% VAT for custom clearance purposes, although the VAT could be reversed with Article 23. Regarding the supply of service, the cross-border transportation on behalf of the seller is also charged with 0% VAT. According to Article 144 of the VAT directive, services related to imported goods where the value is included in the taxable amount are exempt from VAT. This exemption is also referred to as the first-import shipment, where all charges incurred upon the arrival of goods at their first destination within the EU are subject to 0% VAT. Since cross-border transportation carrying goods from outside the EU to the first EU destination falls under this category, it is also charged 0% VAT.

In conclusion, when there is a supply of service between two Dutch companies, 21% VAT is usually charged. However, if the situation is related to the exportation or importation, the service like cross-border transportation, it is always charged with 0% VAT, as the service is not supplied completely within the EU. Thus, a distinction has to be made between situations that taking place within the EU and outside the EU.

Please contact us if you would like to learn more or if you would like our assistance!

 

Contact

Stay up to date

Explore the latest news

Upcoming Dutch and European tax changes & Highlight: negative wages from selling company shares

on June 24, 2025
We have summarized the upcoming Dutch and European tax changes as well as a recent opinion issued by the Knowledge Group of the Dutch Tax Authority regarding “negative wages,” clarifying the tax treatment of losses employees may face when forced to sell shares under bad leaver clauses.
Continue reading

Upcoming Dutch and European Tax changes

on April 24, 2025
To keep you informed about the latest legal and financial developments, we have summarized the upcoming Dutch and European tax changes, including key updates to Dutch income tax, VAT reforms, and major EU-level initiatives like DAC9 and ViDA.
Continue reading