E-Commerce Taxation in the Netherlands

The Dutch tax system, like that of many other countries, has not yet been adapted to reflect the special characteristics of e-commerce. This sometimes results in either double taxation or no taxation at all The most important e-commerce issue impacting Dutch taxation policy is whether an enterprise has a taxable presence in the country where its e-commerce customers are located. Under the current tax rules, profits realized by an enterprise through its business activities are, as a general rule, taxable only in its country of residence. If the enterprise has a permanent establishment (‘PE’) in another country, however, profits derived through that PE are taxable in the country where the PE is located.

The following questions have been addressed in this article:

Why is it important to determine whether virtual supplies qualify as goods or as services for VAT purposes?
What are the administrative requirements for e-commerce transactions?


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