It’s a quintessentially Dutch tradition: the street markets on King’s Night and King’s Day. But do you have to pay VAT on your sales to the tax authorities?
Are you an entrepreneur?
You are required to pay VAT if you are self-employed. You are quickly deemed to be self-employed for VAT purposes, as there is no requirement (unlike with self-employment for income tax purposes) that you must aim to make a profit or that such a profit must be foreseeable. However, if you only sell goods on an occasional basis, you generally do not meet the criterion of participating in economic activity on a lasting basis.
Small business owner
Many traders at flea markets will therefore not qualify as VAT-registered traders. Those who are VAT-registered but have an annual turnover of less than €20,000 may choose to opt for the small business scheme (KOR). In that case, the turnover is exempt from VAT, with the downside being that VAT charged to the trader (input VAT) cannot be deducted. The trader must, however, notify the Tax and Customs Administration in advance of their decision to opt for the KOR.
If annual turnover does not exceed €1,800, the business owner may apply the KOR without having to notify the Tax and Customs Administration in advance. This approval is known as the registration threshold. In that case, the turnover is exempt and the input VAT is not deductible.