- Abolition of Reduced VAT Rate on Agricultural Goods: Starting January 1, 2025, the reduced VAT rate on certain agricultural input goods and services will be abolished as part of the ‘Approach to tax schemes’ simplification operation initiated by the previous cabinet. This change aims to end inconsistencies, such as the different tax rates on food for various animals.
- Historical Context and Discussions: There has been extensive debate over the application of reduced VAT rates on animal feed classified under agricultural goods, particularly regarding definitions of production and companion animals. Since the expiry of the VAT agricultural scheme in 2018, farmers can deduct input VAT, rendering the reduced rate obsolete.
- Impact and Specific Goods Affected: As per the 2024 Tax Plan from the outgoing Rutte IV cabinet, the general VAT rate will apply to specific agricultural goods from January 2025, including legumes, cereals, seed potatoes, livestock, and agricultural seeds. For horse farming, this change means the general VAT rate will apply to the supply of semen, embryos, and horses intended for slaughter. This is part of the evaluation of 116 tax schemes.
Source Taxlive
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