Business prices are often quoted excluding VAT. If you're VAT-registered, you can usually reclaim the VAT, so your real cost is the amount without VAT.
What does this mean in practice?
Excluding VAT is the amount without VAT. Including VAT is the amount with VAT added. In the Netherlands, the standard VAT rate is 21 per cent. So a service costing €1,000 excluding VAT costs €1,210 including VAT.
Why does this matter for your business?
VAT-registered businesses can usually reclaim the VAT on business purchases. For them, the amount excluding VAT is what counts. Customers who can't reclaim VAT, such as private individuals, pay the full amount including VAT. So always be clear about which amount you're quoting.
Examples and best practices
- Always state whether a price includes or excludes VAT.
- Always show private customers prices including VAT.
- An invoice shows the amount excluding VAT, the VAT amount and the total.
- If you're unsure about your VAT, ask your accountant.
How we do it at Ikoon
Ikoon works with fixed package prices: Start €1,250, Growth €1,950 and Complete €2,950. Hosting costs €35 per month. Your invoice lists the amount excluding VAT, the VAT and the total separately. That makes it easy to reclaim the VAT as a VAT-registered business.