VAT: The Invisible Tax System
Discover how VAT is seamlessly collected on everything you buy and how it funds government services invisibly
VAT Rates & Categories
The Netherlands uses three VAT rates to balance revenue generation with social policy. Essential goods are taxed at lower rates to reduce the burden on basic necessities.
Standard Rate
Most goods and services
Examples:
Reduced Rate
Essential goods and services
Examples:
Zero Rate
Exports and specific services
Examples:
How VAT Works
Business Collects
Every business adds VAT to their prices and collects it from customers at the point of sale.
Government Receives
Businesses forward the collected VAT to the tax authorities quarterly, minus their own VAT payments.
Services Funded
VAT revenue funds about 22% of all government spending on healthcare, education, and infrastructure.
Where Your VAT Money Goes
VAT generates approximately €50 billion annually for the Dutch government, making it the second-largest source of government revenue after income tax.
Hospitals, medical care, public health
Schools, universities, teacher salaries
Roads, bridges, public transport
Benefits, social support, elderly care
Military, police, emergency services
Administration, justice, culture
Why VAT is "Invisible"
Unlike income tax that you see deducted from your salary, VAT is built into every price you pay. You never see it as a separate charge, making it politically easier to collect but less transparent for consumers.
Calculate Your VAT Contributions
See exactly how much VAT you pay annually based on your spending patterns with our detailed calculator.