Netherlands: Sunscreen, toothpaste eligible for VAT | KPMG | GLOBAL
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Netherlands: Certain sunscreen, toothpaste are eligible for reduced VAT rate

Netherlands: Sunscreen, toothpaste eligible for VAT

The Dutch Supreme Court (Hoge Raad) on 11 November 2016 held that sunscreen with UVA and UVB filters and toothpaste containing fluoride are pharmaceuticals for purposes of the value added tax (VAT). As such, these products are eligible for the reduced VAT rate of 6% (and not subject to the general VAT rate of 21%).


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To be eligible for the reduced VAT rate, pharmaceuticals do not necessarily have to be medicines, as defined under the Dutch Act on Medicines (Geneesmiddelenwet). 

According to the Dutch Supreme Court, products serving healthcare purposes can be defined as pharmaceuticals when their therapeutic function is explicitly shown or when they are presented in such a manner that the average consumer assumes that the product has this function. 

  • For sunscreen, the presented therapeutic function covers the protection of skin from sunburn by means of the UVA and UVB filters. 
  • For toothpaste, this function entails protection from dental caries through the use of constituents like sodium fluoride.

KPMG observation

The decision by the Dutch Supreme Court has opened ways for imposing the reduced VAT rate of 6% on other products that serve healthcare purposes. 


Read a November 2016 report prepared by the KPMG member firm in the Netherlands: Sunscreen and toothpaste: 6% VAT

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