Any company that purchases and resells lots of return and overstock goods will inevitably have to deal with VAT rules and, in the case of cross-border trade, possibly also with import formalities. This article provides a general introduction to the key points of attention — not tax or legal advice, but a starting point for your own research or a conversation with an accountant.
VAT for business purchases within the Netherlands
If you, as a business owner with a valid VAT number, purchase lots from a Dutch supplier, Dutch VAT is generally simply charged on the invoice, unless a specific scheme applies. Make sure you provide your VAT number and company details correctly to your supplier, so that invoices are accurate for your own bookkeeping and tax return.
Keep the invoices for every purchase carefully: in the event of an audit by the Dutch Tax Authority, you must be able to demonstrate which input VAT you deducted and on the basis of which purchases.
Intra-Community supply: purchasing or selling within the EU
If you, as a VAT-liable company, buy or sell goods with a business in another EU country, the reverse-charge mechanism for intra-Community transactions may apply. In that case, no VAT is stated on the invoice, and you shift the levy to your own tax return. The exact conditions — such as a valid and verified VAT number for both parties and correct reporting on your ICP declaration — differ per situation, so always check this with the Tax Authority or your accountant before relying on it.
This is particularly relevant if, as a Dutch wholesaler, you also serve customers in Belgium, Germany or other EU member states, or purchase lots yourself from a supplier in another EU country.
Import from outside the EU
When goods are imported from outside the European Union, additional matters come into play, such as an EORI number, possible import duties and import VAT at customs. This subject is complex and highly dependent on the type of goods, country of origin and customs value, and falls outside the scope of a general blog post.
If you work with a supplier who has already cleared the goods within the EU, then as a buyer you generally do not need to deal with import formalities yourself — but always ask about this explicitly and have it confirmed to you in writing.
Practical tips for your bookkeeping
Keep purchase and sales invoices separate and organized per lot, so that you can later easily trace the cost price and sales revenue of a specific shipment — this not only helps with your VAT return, but also with determining a realistic selling price.
If you are unsure about the correct VAT treatment of a specific transaction, contact an accountant or consult the Tax Authority's website. Rules and threshold amounts can change and are highly dependent on your specific situation.
A sound administration is the foundation of a healthy wholesale business in return goods. Want to know which product lines fit well with your purchasing strategy? Browse our full assortment or contact us for tailored advice.