Part of the 2025 Tax Plan bill is the abolition of the reduced VAT rate for a significant number of (types of) services. This measure will come into force on 1 January 2026.
During the final stage of the debate on the 2025 Tax Plan bill, the Government promised that this measure would only be implemented in relation to the provision of accommodation. For the other items for which it was proposed to abolish the reduced rate (see below), the Government is seeking a budgetary alternative.
VAT rate
There are two VAT rates. The standard rate is 21%. And for a number of specifically designated (types of) supplies, the reduced rate of 9% applies. Abolishing the application of the reduced rate automatically means that the standard rate will apply to those supplies.
In addition to these rates, there is the 0% rate, which is used in particular to exempt outgoing supplies from VAT. After all, the difference between the 0% rate and an exemption is that the input VAT attributable to services charged at the 0% rate must be deducted. The tax plans for 2025 do not provide for any changes to the application of the 0% rate.
Abolished
The (types of) services for which the reduced rate will be abolished with effect from 1 January 2026 are (reference is made to the items in Table I of the Turnover Tax Act):
- the supply of works of art (item a.29);
- the supply and (electronic) lending of (e-)books (items a.30, b.2 and b.21);
- providing opportunities for sport and swimming (item b.3);
- the provision of accommodation within the context of the hotel, café, restaurant, guesthouse and related sectors (item b.11);
- providing access to public museums and similar institutions (item b.14, part c);
- providing access to musical and theatrical performances (item b.14, part d);
- granting access to sporting events, demonstrations and the like (item b.14, part f);
- performances by performing artists (post b.17).
Entry / transitional arrangements
The rate increase will come into effect on 1 January 2026. The transitional arrangement means that VAT must be paid at the standard rate (21%), rather than the reduced rate (9%), on all services provided after 31 December 2025. Businesses that receive advance payments in 2025 for services to be provided in 2026 (or later) should therefore already take into account that VAT at the standard rate must be paid on the amount received in advance.
No separate bill
In a motion, Senator Van Meenen (D66) has called on the government to include the abolition of the reduced VAT rate in a separate bill. Finance Minister Heinen has announced that it will not implement this motion. The abolition of the reduced VAT rate is intended to provide budgetary cover for other measures in the bill and cannot therefore be separated from it.
The Tax Plan 2025 bill is still being debated in the House of Representatives. It is therefore not yet certain whether the abolition of the reduced rate will actually go ahead (in whole or in part). It is possible that politicians may still find alternative budgetary funding for one or more items, meaning that those items could continue to be subject to VAT at the reduced rate after all.
Accommodation
MP Sneller (D66) has asked a considerable number of questions regarding the abolition of the VAT rate on accommodation, to which State Secretary for Finance Idsinga A response has now been received. Item b.11 is being abolished, but item b.10 is not. This means that the reduced VAT rate will continue to apply to the provision of camping facilities.
In his replies to parliamentary questions, Idsinga confirms that the reduced VAT rate on overnight stays at holiday parks and short stays will indeed be abolished. He sees a clear distinction between these services and the provision of camping facilities. According to the State Secretary, the letting of fully equipped tents and (static) caravans does not qualify as providing facilities for camping, but rather as the provision of accommodation, to which the standard rate will apply from 2026.