The old VAT number of a sole trader incorporates his citizen service number/social security number. Earlier this year, the Dutch Data Protection Authority ruled that a new system was needed for reasons of privacy protection and potential identity fraud, and that system is now being implemented.

New VAT number
During this and coming months, the tax administration will be issuing new VAT numbers to sole traders, the “VAT identification number”. From 1 January 2020, sole traders will have to use this VAT identification number on their invoices, their website and any other communications in business transactions. The VAT identification number is no longer linked to the sole trader’s citizen service number.

Old VAT number
However, the old VAT number still remains active. The old VAT number will remain in use for communications with the tax authorities (such as VAT returns).

Action items for all sole traders
• Make sure your VAT identification number is shown on invoices, stationery and your website or webshop from 1 January 2020.
• Please send us a copy of the tax administration’s letter that quotes the VAT identification number.
• We also recommend to inform your customers and (preferred) suppliers of the VAT identification number in time.
• To be on the safe side, you can include a separate line on the invoices you will be sending in (the first months of) 2020: “please note: new VAT identification number”.

Action items for sole traders who do business in other EU countries
• If you purchase goods from a supplier based in another EU country, make sure he is notified of your VAT identification number in time.
• If you purchase B2B services from a business based in another EU country, make sure the service provider is notified of your VAT identifi cation number in time.
Your supplier/service provider will check if you are registered as a VAT entrepreneur in the Netherlands, and from 2020, they can only make such checks against your VAT identification number.

Action items for sole traders who do business outside the EU
• If you export goods, you need an EORI number for customs formalities. This EORI number is also changing, so make sure to inform your haulier of your new EORI number in time.

Action items for businesses that do business with a sole trader
• Include the new VAT identification numbers of your customers and suppliers in your records.
Please note: according to legislation pertaining to the tax retention obligation, VAT numbers form a part of the “master data”. When the master data changes, you are obliged to retain the old master data as well. In other words, you cannot just overwrite the old VAT numbers of your customers and suppliers with the new VAT identification number in your database.
• If you make deliveries or provide services to a sole trader and you reverse-charge the VAT to him, you have to make sure that this sole trader notifies you of his VAT identification number in time, because from 2020, you have to quote his VAT identification number on your invoice if you reverse-charge the VAT.
• Include the new VAT identification numbers of your customers and suppliers in your records.

Action items in connection with accounting software
The old VAT numbers were structured in accordance with a certain method. Some accounting software has a built-in check to find out if a VAT number that is entered complies with this method. The new VAT identification number will have a new structure. Software suppliers have been informed accordingly. Make sure you have the latest version of your accounting software by 1 January 2020

If you have any questions about this newsletter, please contact us on +31 (0)344 621 222. We are happy to assist.