What is input tax (meaning)
Input tax is the VAT you pay on business purchases and services. Think of office supplies, a laptop or your accounting software. You can reclaim the VAT paid if the costs are really for your business. This way, you avoid paying VAT twice. You charge VAT to customers and deduct the VAT on your own purchases. In the end, you only pay VAT on the value you add yourself.
Preload example
You can deduct the VAT you pay on business purchases from the VAT you charge customers. This way, you end up paying VAT only on what you sell, not on your expenses. A brief example:
- You buy a laptop for 1,210 euros (including VAT)
- This includes 210 euros of VAT
- You can deduct that 210 euros as input tax in your tax return
- You receive 800 euros of VAT from customers
- So you pay 800 - 210 = 590 euros to the Tax Office
Calculate and reclaim input tax
You calculate input VAT by adding up all VAT on business purchases. You enter that amount in your VAT return. The tax authorities automatically offset this against the VAT you received on your turnover. You pay the difference or get a refund. Always check whether your records are correct and whether invoices meet the requirements. Without a valid invoice, you cannot deduct VAT, no matter how small the amount.
Deduct input VAT
You cannot reclaim every VAT paid. The purchase must be business and used for taxed turnover. You can never deduct VAT on private expenses. If you work partly VAT-exempt, you may only deduct part of the VAT. Only expenses that you use for activities on which you charge VAT count in full. This is how you keep your records clean and avoid errors when audited.
Correct invoice (or receipt)
A correct invoice includes name and address of supplier and customer, VAT number, date, invoice number, description, amount excluding VAT and VAT amount. For small purchases of up to one hundred euros, a receipt is sufficient.
When to do it and when not to do it?
You can deduct VAT on business purchases such as software or tools. Not on private expenses or catering costs. If you work partly exempt, you deduct VAT only on the part that belongs to your taxed turnover.
| Situation | VAT deductible | Notes |
| Purchase for taxed sales | Yes | For your business, use what you charge VAT on |
| Purchase for exempt sales | No | No right to deduction in case of exemption |
| Shared use business and private | Partially | Only the business part deductible |
| Hospitality costs or promotional gifts | No | Usually excluded from VAT deduction |
Input tax on foreign VAT
If you make business purchases abroad, different rules apply. If you pay VAT in an EU country, you cannot deduct it in the Netherlands. You reclaim this VAT via a digital request to the tax authorities. Outside the EU, you must do this directly with the foreign tax authorities. If you buy something from an EU country where the VAT has been transferred, you report this VAT yourself in the Netherlands and deduct it directly in the same tax return.
Input tax on VAT reverse charge
If an invoice says “reverse charge VAT”, the supplier does not charge VAT. You have to declare that VAT yourself in your VAT return. You calculate the amount and immediately deduct it as input VAT. This way, you do not have to pay anything extra as long as it concerns taxed turnover. If you use the purchase for exempt activities, you may not deduct the VAT and must pay it yourself.
Read more about VAT-referred.
Input tax under VAT exemption
If you work in an exempt sector, such as healthcare, education or financial services, you do not charge VAT. As a result, you cannot deduct the VAT on your expenses. If you have mixed turnover, you may only deduct VAT on the taxed part. You can use an apportionment key for this, such as the percentage of your total turnover that is taxed.
Read more about VAT exemption.
Preload in the run-up phase
Even without turnover, you can reclaim VAT on your start-up costs. Think of equipment, marketing or advice. You must be able to prove that you intend to start VAT-taxed activities. Keep quotations, invoices and any time sheets as proof of your preparations. Did you already incur expenses before registering with the Chamber of Commerce? Then you can usually also reclaim the VAT on these in your first tax return.
