Anyone who earns money with horses — boarding, training, teaching, or trading — has to deal with VAT and income tax. The rules differ per activity, and the VAT rate is a recurring point of dispute. This is the outline; for your exact situation, a tax advisor or the Belastingdienst (the Dutch Tax Administration) is the source.
When Is It a Business?
The first question is the most important one for tax purposes: are you running a business, or do you keep horses as a hobby? That distinction determines whether you have to pay VAT, whether your profit is taxed, and whether you can deduct costs.
The Belastingdienst looks at a number of indicators, not a single figure:
- Profit motive and profit expectation — are you reasonably aiming for profit, or at most covering your own costs?
- Scale and continuity — occasional sales versus a structural activity with multiple clients.
- Business risk — are you investing your own money, do you run the risk of a loss?
- Independence and how you present yourself externally — your own bookkeeping, invoices, a name you operate under.
VAT uses a broader definition of a business than income tax does: you can be a business for VAT purposes (and therefore liable for VAT) while for income tax you don't yet have "profit from business" at all. It's entirely possible to count as a business for one tax and not for the other. Have that classification confirmed before you start invoicing.
VAT Rates by Activity
This is where most of the confusion lies. The VAT rate depends on exactly what you supply, not on the fact that it involves horses. In broad terms:
| Activity | VAT treatment (broad outline) |
|---|---|
| Boarding / stabling horses | Usually the standard (high) rate |
| Training and schooling | Usually the standard (high) rate |
| Teaching / instruction | High rate; a sports exemption may apply for associations |
| Selling a horse (trading) | Standard rate, sometimes the margin scheme |
| Boarding as part of an agricultural business | May differ; have this checked |
Practice is more nuanced than this table. Whether a bundled service (for example, boarding including training and storing equipment) counts as a single supply or as separate supplies affects the rate. The reduced rate that sometimes applies to agricultural supplies or certain services has been narrowed over the years. Don't assume that a rate used by a stable down the road also applies to you — check the current classification with the Belastingdienst or a tax advisor who knows the horse sector.
Horse Trading and the Margin Scheme
Anyone who buys and sells horses is trading. On a sale, you charge VAT on the sale price in principle, and you can deduct the VAT on your purchases and costs.
For animals you buy from a private individual (no VAT on the invoice), the margin scheme (margeregeling) can come into play: you then only pay VAT on your margin — the difference between purchase and sale price — instead of on the full sale price. That makes a substantial difference, but it places strict demands on your bookkeeping: the purchase and sale must be traceable per animal. Keep purchase declarations and watertight inventory records; without that documentation, the benefit is lost.
For sales abroad, different rules apply again (an intra-Community supply within the EU, or export outside it). A 0% rate often comes into play there, provided you record the correct documents and the buyer's VAT number.
Small Businesses Scheme and Limits
If your turnover stays under a set threshold, you may be able to use the small businesses scheme (kleineondernemersregeling, or KOR): you then don't charge VAT and don't pay any, but you also can't deduct VAT. For a small stable or a single trading transaction per year, that can bring administrative peace of mind; for anyone investing heavily (and therefore having a lot of deductible VAT), it actually works out unfavorably.
Calculate it both ways before you sign up: the KOR is a choice with a minimum term, not a switch you flip every quarter. With substantial investments — a new stable, an expensive breeding stallion — the right to deduct VAT often outweighs the convenience of not filing returns.
Income Tax and Deductible Costs
If there's a business, the profit is taxed under box 1 (the Dutch income tax category for income from work, business and the owner-occupied home), and you can deduct business costs: feed, farrier, veterinarian, stable maintenance, depreciation on equipment, and — for a purchased trading horse — the purchase value. Business owners who meet the hours criterion (urencriterium, a minimum-hours test) can also claim business tax facilities such as the self-employed persons' deduction (zelfstandigenaftrek).
Pay attention to the separation between private and business. Your own competition horse that you ride as a hobby usually doesn't belong on the business books, even if it stands in the same stable as the boarders' horses. The Belastingdienst reviews this critically; a mix of private use and business costs is a classic point of discussion during an audit. Keep the business's records and your private horse's records separate.
Practical Approach
The tax side of a horse business is manageable as long as you get the basics in order early:
- Determine your status in advance — business or hobby, and separately for VAT and for income tax. Request a preliminary consultation with the Belastingdienst if needed.
- Register with the Kamer van Koophandel (KvK, the Dutch Chamber of Commerce) if you start a business; your VAT registration follows from that.
- Check your VAT rate per activity, not by assumption. Boarding, training, lessons, and trading can each work out differently.
- Keep watertight records, especially for the margin scheme and the private/business separation.
- Bring in a tax advisor who knows the horse sector. Amounts, thresholds, and rates change periodically; this guide gives the structure, not the current figures.
For the exact rates, thresholds, and conditions for this year: consult the Belastingdienst. Terms like boarding, training, and stabling are explained in the glossary.
See also: What horse riding costs · Level: For Professionals