Preparing your VAT return

What is a VAT return?

VAT is the acronym for value added tax, which is the tax that is due on the consumption of goods and services. The final consumer owes you VAT on the products or services it has purchased from you. You are expected to remit this VAT to the tax authorities. As a business, you can most likely deduct VAT that has been charged to you. You will report the VAT you have charged and the VAT you have paid in your VAT return. The two amounts are offset. If you have charged more VAT than you have paid, you will owe the balance to the tax authorities.

When do I need to file a VAT return?

As a business owner, you are required to report VAT in your periodic tax return and pay the tax you owe. Most businesses in the Netherlands file their VAT returns quarterly, but you can also ask the tax authorities for permission to file monthly or annual tax returns. The tax returns are filed digitally. Your first return is an exception; it can be filed on paper. If your business exclusively engages in exempted transactions, you do not, in principle, have to file VAT returns. The same goes for businesses that do engage in taxed transactions, but are eligible for the small business scheme.

Please remember

If you do not file your VAT return or fail to file it within the filing deadline, you may be sanctioned with a penalty. Failure to pay the VAT due or to pay the tax by the payment deadline is also sanctionable by penalty.

Tip

If your business does not generate more than € 20,000 in revenue annually, you will be eligible for the small business scheme, meaning that you will be exempt from VAT.

How do I file a VAT return?

To file a VAT return, you need to log in to the Dutch Tax and Customs Administration’s business portal. If you have your own tax or accounting software, you may be able to use this software to file your returns. A Dutch VAT return is divided into the following five categories:

• Goods or services in the Netherlands
• Domestic reverse-charge mechanisms
• Goods or services to or in foreign countries
• Goods and services supplied to you from abroad
• Input tax

The more categories apply to you, the more complicated your return will be. If you have made an incorrect or incomplete filing, you are expected to correct this in your next VAT return or by filing a supplementary return. If you fail to do so, you risk being sanctioned with a penalty. Click here to find out more about the consequences of filing an incorrect VAT or supplementary return, not filing a return or failing to file a return by the deadline.

We can of course also file your VAT returns for you. This will save you time because you do not have to worry about the nitty-gritty; we will take care of that for you. Your VAT returns are in safe hands with us. We also look for efficiencies in your VAT returns so that you might save on your tax expense. And we can help you with your VAT rights and obligations outside the Netherlands.