VATLive > Blog > VAT > Netherlands told by IMF to implement single VAT rate - Avalara

Netherlands told by IMF to implement single VAT rate

  • VAT
  • 25 December 2014 | Richard Asquith

Netherlands told by IMF to implement single VAT rate

The Dutch VAT rates have come in for criticism from the International Monetary Fund (IMF). It has recommended that the Netherlands merge the current standard VAT rate of 21% with the reduce VAT rate of 6%.

The suggestion is aimed at reducing the administrative burden on maintaining two rates, but also to eliminating the distortions caused with some goods being at a lower rate. Any increase in the proportion of tax levied on the less well off could be balanced with targeted benefit increases.

Any such amalgamation could help fund a competitive cut to the Dutch labour and corporate income tax rates. This would help ensure that the Netherlands was able to maintain and attract global investment from job-creating industries. The IMF also suggested an income tax cut as the Netherlands has one of the highest marginal rates in the world.

The Netherlands raised its VAT rate from 19% to 21% in 2012 at the height of the Euro currency crisis.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.