Is there VAT on bank charges? No, and here is why
Written by Ilias Aarrass5 min read · Published on · Last reviewed on 
In short
There is no VAT on bank charges: financial services are exempt, so there is nothing to reclaim. The charges themselves are fully deductible from your profit.
- Exempt is not the same as zero-rated: with an exemption the right to deduct input VAT lapses too.
- Book bank charges with the VAT code for exempt or untaxed, never at 21%.
- Not everything on your statement is a financial service: safe rental, advisory and admin services and software subscriptions carry the regular 21%.
- If you booked bank charges at 21% before, you correct that with a supplementary VAT return.
Your business account costs a few euros a month, and the statement shows no VAT amount. Yet many entrepreneurs book those costs at 21 per cent, after which the return no longer adds up. The answer is short: financial services are VAT-exempt. But there are exceptions, and people often confuse exempt with deductible.
Why there is no VAT on it
Financial services are exempt under Dutch VAT law. Payment traffic, holding an account and providing credit all fall under it. So your bank charges no VAT and could not do so even if you asked.
Important: exempt is not the same as zero-rated. With the zero rate you can still reclaim VAT on your own costs; with an exemption you cannot. VAT exemption or zero rate explains the distinction.
Deducting from profit is fine
This is where the confusion sits. There are two separate questions: can you reclaim the VAT, and can you deduct the cost from your profit? For bank charges the answer is no to the first and yes to the second.
The cost of your business account is an ordinary business expense. You book the full amount as costs, with no VAT component. If you keep private and business separate, it is easy to trace.
What does carry VAT
Not everything on your bank statement is a financial service. Several services banks and payment providers deliver fall outside the exemption and carry the regular 21 per cent.
| Item | VAT |
|---|---|
| Monthly account fee | Exempt |
| Transaction and card fees | Exempt |
| Interest on business credit | Exempt |
| Safe deposit box rental | 21% |
| Advisory and admin services | 21% |
| Accounting-integration subscription | 21% |
How to book it
In any accounting package you pick a VAT code when booking. For bank charges, choose the code for exempt or untaxed purchases, not the 21 per cent one. Choosing 21 means reclaiming VAT in your VAT return that was never paid, which surfaces in an audit.
- Book the full amount as costs, without splitting off VAT.
- Use the VAT code for exempt or no VAT.
- Check your statement for items that do carry 21 per cent, such as software subscriptions.
- If you booked it wrongly in the past, correct it with a VAT adjustment.
Frequently asked questions
Is there VAT on bank charges?
No. Financial services such as payment traffic, holding an account and providing credit are VAT-exempt. So your bank charges no VAT on them.
Can I deduct bank charges from my profit?
Yes. The cost of your business account is an ordinary business expense you deduct in full from profit. Only the VAT cannot be reclaimed, because there is none.
What is the difference between exempt and zero-rated?
With the zero rate you charge nothing but may still reclaim VAT on your own costs. With an exemption you charge no VAT and may not deduct the VAT on related costs.
Which bank services do carry VAT?
Services that are not financial services, such as safe deposit box rental, advisory and administrative services and subscriptions to software or an accounting integration. Those carry the regular 21 per cent.
Sources
- VAT exemptions, including financial servicesBelastingdienst · belastingdienst.nl
- Correcting a VAT return with a suppletieBelastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
