Solar panels and VAT – what about your holiday home in the Netherlands?

From 1 January 2023, the VAT rate on solar panels will be reduced from 21 per cent to 0 per cent in the Netherlands. For private individuals, this is effectively an abolition of VAT on solar panels. The rate reduction applies not only to the purchase price, but also to the costs of installing the solar panels and solar panels as roof covering, on or in the immediate vicinity of homes.

Goal: reduction of paperwork

The purpose of the VAT reduction is to lighten the administrative burden. With the VAT reduction from 21 per cent to 0 per cent, private individuals will no longer need to claim back the VAT from the Tax and Customs Administration when buying solar panels.

Incentive to purchase solar panels

The government also hopes the measure will encourage more individuals to purchase solar panels. The lower amount to be invested and, if necessary, to be financed will certainly help.

Please note that the rate reduction only applies if the solar panels are installed on or in the immediate vicinity of homes or house annexes, such as a shed.

Holiday home

The small business scheme may not be applied to non-residents of the Netherlands who own a holiday home in the Netherlands. When they have solar panels installed on the roof and supply electricity back to the grid, they must (in principle) file VAT returns.

In future the 0% rate may presumably also be applied to intra-Community acquisitions, the import and the installation of the solar panels. Installation means the service of installing and connecting solar panels on or in the immediate vicinity of homes. In other words, installation should not be construed to mean only the attaching of solar panels. If you would like to know the implications for you as an owner of a holiday home in the Netherlands, please contact your Flynth adviser.

Contact

If you have a second home or holiday home in the Netherlands, even more rules apply that are relevant from a tax perspective. Your international adviser will be happy to advise.

Email: international@acconavm.nl