Netherlands – Reversal of VAT Rate Increase, Property Rules, and Cross-Border Compliance Part of 2026 Tax Plan Package

The long-standing tradition in the Netherlands is that on the third Tuesday in September, known as Prinsjesdag or Budget Day, the Dutch King delivers a speech that summarizes the state of the nation and outlines the government's plans for the coming year. Traditionally,  after the speech, the Minister of Finance presents the National Budget and the Budget Memorandum, which includes many bills, laws, and amendments, including those referring to VAT matters.

Key VAT Measures from 2026 Tax Plan Package

As part of its 2026 Tax Plan package, the Dutch government decided to reverse its earlier plan to raise the VAT rate for culture, media, and sports from 9% to 21%, meaning the increase will no longer take place. Simultaneously, compensation that had been promised to schools for VAT on teaching materials will also be withdrawn.

In contrast to the VAT increase for culture, media, and sports, the VAT rate for accommodation services, such as hotels and holiday lets, will increase from 9% to 21% in 2026, unless Parliament intervenes to overturn it. Notably, a transitional rule will ensure that stays booked and paid for in 2025 will be subject to the higher VAT rate, even if they are stayed in 2026.

Furthermore, from 2026, the VAT adjustment scheme will be extended to property investment services, with a EUR 30,000 threshold per service and a five-year adjustment period. Additionally, the VAT exemption for social and cultural services will also apply to institutions with a profit motive, thereby correcting the restrictive effect of a 2023 Supreme Court ruling.

One of the critical procedural rules includes the elimination of the possibility of filing objections and appeals against VAT nil returns, starting in 2026, as a nil payment will officially be considered a payment under the law.  For foreign businesses, it is essential to note that, beginning on January 1, 2026, they will be required to attach invoices and import documents for amounts exceeding EUR 1,000, or EUR 250 for fuel, when requesting a VAT refund. 

Conclusion

With the 2026 Tax Plan, the Dutch government aims to strike a careful balance between fiscal responsibility, legal clarity, and fairness in the VAT system. A notable example of this is that the government plans to reverse the VAT increase for culture, media, and sports, while maintaining the scheduled increase for accommodation services. By doing so, the policymakers are signaling both sensitivity to social and cultural concerns and determination to broaden the tax base where justified.

Source: Deloitte, VATabout, Dutch Government