Implementation of the Second VAT Simplification Directive

KPMG comments on the Dutch implementation of the Second VAT Simplification Directive

This is contribution number 28 by KPMG Meijburg & Co regarding the Dutch implementation of the Second VAT Simplification Directive

The Netherlands will implement the Second EU VAT Simplification Directive with effect from 1 January 1996. The Directive tries, amongst others, to simplify the VAT-procedure for:

1. temporary import of goods for further processing activities;
2. transfers of goods stored in special VAT-warehouses.

In general, it concerns a straightforward implementation. Please note the following, however:

- The Netherlands will not use the option to extend the adjustment period regarding immovable property (capital goods scheme) to 20 years, as mentioned in art. 20(2) of the Directive; instead this period will be kept at 10 years.

- the existing Dutch tax warehouse schemes for storage of excise goods and raw materials will be simplified with respect to foreign traders; regarding trade in goods stored in a new type of tax warehouse such traders will no longer have to register in The Netherlands as long as the sold goods remain stored in the warehouse; the trade itself will be zero-rated as long as the goods remain stored in the warehouse.

- The Netherlands will use the derogation of art. 28(2)h with respect of contract work to assemble goods; such contract work is reduced- rated at 6% if the reduced rate would apply to straightforward supplies of the end-product concerned.

This message is most likely to be relevant for EU-enterpreneurs.

Further information can be obtained from mr Alfred GM Groenen, MCL, KPMG Meijburg & Co, Amsterdam (Netherlands); fax 31 (20) 656 1247

Keywords: Netherlands / Dutch / Europe / EC / EU / European Union / KPMG Meijburg & Co / inward investments / MNE / VAT / Directives / warehouse

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