The Dutch government has announced that administrative fines for non-payment or late payment of VAT on e-commerce transactions will resume on January 1, 2025, following a temporary waiver that began with the implementation of the EU’s 2021 e-commerce VAT reforms. This decision comes after addressing initial compliance challenges and aims to reinforce adherence to the One Stop Shop (OSS) VAT reporting system. Businesses are urged to review their VAT obligations to avoid penalties as stricter enforcement takes effect in 2025.
The Netherlands: VAT Fines for E-Commerce Set to Resume; Businesses Must Adhere to Compliance to Avoid Penalties
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Author: Ivana Picajkić
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Content accuracy validation date:
21.01.2025
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The Dutch government has announced that starting January 1, 2025, administrative fines for non-payment or late payment of VAT on e-commerce transactions will be reinstated, marking a return to stricter enforcement under the EU’s 2021 e-commerce VAT reforms. This follows a temporary waiver of such fines that was in place from July 1, 2021, to December 31, 2024, which was implemented to help businesses navigate the complexities of the new One Stop Shop (OSS) VAT reporting system.
The decision to waive fines during this transitional period was made due to several challenges faced by businesses and tax authorities. These included uncertainty regarding the new rules, startup issues among EU tax authorities that delayed cross-border coordination, and resource constraints within the Dutch tax authorities, which struggled with personnel shortages and high costs associated with processing taxpayer appeals.
As of July 29, 2024, the State Secretary for Finance confirmed that while fines would remain suspended until January 1, 2025, a Decree was retroactively issued effective June 1, 2024, ensuring that any penalties imposed during the interim period would also be waived. From January 1, 2025, businesses must comply with their VAT obligations under the OSS system to avoid penalties.
The reinstatement of administrative fines emphasizes the Netherlands’ commitment to enforcing the harmonized VAT rules introduced under the EU’s 2021 e-commerce package. These reforms aim to close VAT gaps, reduce fraud, and simplify cross-border trade within the EU. With improved administrative capacity and clearer guidelines now established, the Dutch government is prepared to enforce stricter VAT compliance for e-commerce businesses operating through the OSS framework.
Businesses are therefore reminded to review their VAT reporting practices and ensure they are ready for the resumed enforcement starting in 2025.
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