What you do with a VAT return
With the return you tell the Dutch Tax Authority how much VATA tax you charge your clients on your sales and pass on to the tax authority. The Netherlands has three rates: 21, 9 and 0 per cent.
Read more you charged on your sales and how much VAT you may deduct on your business purchases, the input VAT. You pay the difference, or you get it back. You file through the Tax Authority's business portal (Mijn Belastingdienst Zakelijk) or through your accounting software.
Most small businesses file per quarter. Which period applies to you is stated in the Tax Authority's letters. Some businesses file monthly or yearly. The return and the payment generally have to be in by the last day of the month after the period. For the third quarter that means 31 October. Check the exact dates in Mijn Belastingdienst Zakelijk, as they can fall on a weekend or change.
The small business scheme
If your turnover stays below a certain limit, you can use the small business scheme (KOR). That limit is 20,000 euros of turnover per calendar year, excluding VAT. With the KOR you do not charge VAT to your clients and you do not file VAT returns. The other side is that you cannot reclaim VAT on your purchases either.
You register through Mijn Belastingdienst Zakelijk, well before the start date. If your turnover goes over the limit during the year, the exemption ends from the supply that takes you over it. Before you choose, read the current conditions on belastingdienst.nl, including how long you must take part at minimum. What then has to appear on your invoices is covered in the guide on invoice requirements.
The figures you need
For the return you need two kinds of data. On the sales side these are the amounts excluding VAT per rate and the VAT on them. On the purchase side these are the VAT amounts on business costs that you may deduct. The main boxes:
- 1a: supplies and services in the Netherlands at the high rate of 21 per cent
- 1b: supplies and services at the low rate of 9 per cent
- 1e: supplies and services taxed at 0 per cent or on which you charge no Dutch VAT
- 3b: supplies and services to businesses in other EU countries, for which you also file an ICP (intra-Community supplies listing)A listing for the Dutch Tax Authority of your business supplies to clients in other EU countries, in addition to the regular VAT return.
Read more return - 4a: services from businesses outside the EU where the VAT has been shifted to you
- 5b: the input VAT, so the VAT you may deduct
Which amounts go in which box is something to check in the Tax Authority's explanation with the form, or with your accountant. The layout can differ for your situation.
An example with figures
An invented service provider closes the quarter with these figures:
- Turnover at 21 per cent: € 18,500, VAT € 3,885 (box 1a)
- Turnover at 9 per cent: € 2,000, VAT € 180 (box 1b)
- Input VAT on business costs: € 1,150 (box 5b)
- To pay: € 3,885 plus € 180 minus € 1,150 is € 2,915
Check beforehand that the total of your invoices in the quarter matches the turnover in your return. That way you find forgotten or duplicate invoices before the Tax Authority does.
What to check beforehand
- Are all invoices of the quarter in your records, including credit notes?
- Is the VAT rate right on each invoice, and are reverse-charge invoices marked separately?
- Are all purchase invoices and receipts processed, with the right VAT deduction?
- Have you checked your EU clients' VAT numbers in VIES?
- Is the ICP return ready, if you need one?
- Have you kept a backup or printout of the return?
You generally use the invoice basis: you report the VAT in the period in which you invoice, even if the client has not paid yet. If a client does not pay, you can under conditions reclaim VAT. Ask your accountant when that is possible.
This is general information and not tax advice. Your situation may differ, and rules and amounts change. Check the current rules with the Dutch Tax Authority or ask your accountant.
A fixed routine each quarter
People who start just before the deadline make the most mistakes. So plan a fixed moment, for example in the first week after the quarter. First close the quarter: all invoices sent, all purchase invoices and receipts processed, credit notes included. Then check the figures, complete the return and pay the amount, so that it reaches the Tax Authority well before the last day.
Note the difference between filing and paying: both have to happen on time. Afterwards keep a printout of what you filed, together with the underlying invoices. That way you can show how you arrived at your figures if there are questions or a check.
What Avsaro does for you here
A report with all your sales VAT per quarter saves you the adding up. It is an aid and not a return. Input VAT, the VAT on your purchases, is not in it: that sits in your accounting software. You file the return itself through Mijn Belastingdienst Zakelijk or through that software.
Frequently asked questions
When must my VAT return be in?
Generally by the last day of the month after the quarter, and you must have paid by then too. Check the exact date in Mijn Belastingdienst Zakelijk.
What is the turnover limit of the small business scheme?
It is 20,000 euros of turnover per calendar year, excluding VAT. Check the current conditions on belastingdienst.nl.
What happens if I am late?
You can get a fine and interest. If you do not file at all, the Tax Authority can estimate the amount and impose an additional assessment.
Do I also have to file an ICP return?
Only if you supply services or goods to businesses in other EU countries and those fall under box 3b. Check this with the Dutch Tax Authority.
This explanation is general information, not legal, tax or accounting advice. Rules change and your situation may differ. If in doubt, ask your accountant or adviser, or check with the Dutch Tax Administration (Belastingdienst) or the Chamber of Commerce (KvK).
