News item | 07-02-2025 | 14:15
At the request of the Parliament, the government has mapped alternatives for the VAT increase on culture, media and sport. In addition, options within VAT was considered. Possibilities are the scrapping of specific reduced rates, increasing the reduced rate, increasing the general rate, or a combination of these. There are both advantages and disadvantages to each alternative. The choice is ultimately the parliament. State Secretary Van Oostenbruggen writes this in a letter to the House of Representatives.
The Van Dijk CS motion was adopted during the handling of the Tax Plan 2025. This motion instructed the government to look for an alternative to the VAT increase on culture, media and sport. This was searched for an alternative within VAT. In addition, the starting points were that an alternative should not increase complexity, it is legally sustainable and it yields sufficiently.
Alternative spring sources
Within VAT there are several ways to achieve alternative coverage. First of all, other reduced rates can be deleted. There are many different reduced VAT rates at the moment. They are negatively evaluated and ensure a complex system. The abolition of one or more reduced rates helps to simplify the tax system. The consequence of this is that entrepreneurs and customers are affected in those specific sectors.
Another alternative is to increase the existing rates: the reduced rate of (now 9%) and/or the general rate (now 21%), or a combination thereof. Increasing the reduced rate is a first step towards one VAT rate. The result of increasing the reduced rate is that this makes daily groceries more expensive. Increasing the general VAT rate is also a possibility, but the House of Representatives has indicated with a motion that it does not want this.
Uniform VAT
It is also possible to take a first step towards one uniform VAT rate. This is a possible supplement to the aforementioned alternatives. This could be, for example, due to the reduced rate for all products that now fall under it, except for foods. The step to switch to one uniform VAT rate in one go is too big. That is why a new middle rate could temporarily apply in addition to the general and reduced rate. Creating an extra rate in VAT is currently not technically possible. That is only possible at the earliest from 2027, because the tax authorities are still working on a new VAT system. Adjusting rates or moving certain products or services from the low to the general rate is more than 2027.
Follow-up
The choice of alternative coverage for the VAT increase on culture, media and sport is in parliament. A choice must be made in the short term. This is necessary to create clarity for entrepreneurs, citizens and the tax authorities, but also to be able to go through the legislative process in a good way. The cabinet strives to amend the law before 1 July 2025. The alternative will then apply as of January 1, 2026. For example, there is still half a year of preparation time. If no alternative is chosen, the VAT increase on culture, media and sports and in operation as already states as already stated on 1 January 2026.