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In the Netherlands, entrepreneurs must file Value Added Tax returns (btw aangifte) with the Dutch Tax and Customs Administration on a monthly, quarterly or yearly basis (usually quarterly). You must file your returns digitally and on time, to avoid a fine. In your VAT return, you register the amount of VAT you have paid and received, to reach the amount you must pay (or get a refund).
Who files a VAT return?If your business is registered with the Netherlands Chamber of Commerce, you most likely have to file VAT returns. There are some exceptions: for example, if goods or services are exempt from VAT, such as childcare and the services of funeral directors, you cannot charge VAT. Usually this also means deduction of paid VAT is not possible. Non-resident businesses doing business in the Netherlands may have to file a VAT return as well. Use the Registration of Non-Resident Entrepreneurs Aid to find out if registration in your case is necessary. If so, you must use the Application for VAT identification number for foreign entrepreneurs form (PDF).
Filing your first VAT returnOnce you have registered your company with the Netherlands Chamber of Commerce (resident companies) or with the Dutch Tax and Customs Administration (non-resident companies), the Dutch Tax and Customs Administration will send you information about your liability for VAT. You will receive a letter telling you how and when to file your VAT returns. You’ll also receive a user name and a password for filing digitally. You might have to file your first return on paper; the Tax and Customs Administration will inform you.
Filing your VAT return onlineYou file your VAT returns digitally online. To do this, you must login on the Tax and Customs Administration website. This site is available in Dutch only. You can also choose to file your return using software applications from commercial parties, but be aware that the software must comply with Standard Business Reporting (SBR). You can also hire the services of a tax representative, who will conduct all your dealings with the Tax and Customs Administration on your behalf.
Monthly, quarterly or yearly?The Tax and Customs Administration will notify you how often you have to file a VAT return: monthly, quarterly or yearly. The most common frequency is quarterly. If you want to file your returns on a monthly or yearly basis, it is possible in certain conditions. Send a letter to the Tax and Customs Administration to arrange this.
Are you eligible for the Small Businesses Scheme?If the amount of VAT you have to pay yearly is less than € 1,883, you may be eligible for the Small Businesses Scheme (kleineondernemersregeling or KOR in Dutch). Other conditions are that you must be a natural person (so not a legal personality), resident in the Netherlands, and are able to prove you don’t have to pay more than € 1,833 (in other words, have your business records in order). If you are eligible, you will have to pay less or no VAT (you can also claim a refund).
Make sure to file and pay on timeAlways make sure to file your return and pay the requisite sum on time. You will not receive a notification to file, this is your own responsibility. To help you, the BTW Alert app (in Dutch) can notify you when your VAT return is due. You calculate the amount you have to pay or receive in your tax return form. You will not receive a notice of assessment for your VAT. If you fail to file your VAT return or pay in time, you will receive an additional assessment.
VAT return for services to or from abroadIf you supply services to a foreign country or purchase services from abroad, you may have to declare part of the VAT paid or charged for these services in the Netherlands and part in the country you are doing business with. You can find more information on the Tax and Customs Administration website (in Dutch).
Filling out the VAT returnYou use the VAT return to declare the VAT you have charged to your customers. You also declare the amount of VAT you have paid to your suppliers. You also file VAT that has been reverse-charged to you. You either pay or receive the balance. There are several tariffs and exemptions. Make sure you’re using the correct tariff. For some expenses, like personal expenses and expenses made for business gifts (of over €227), the VAT is non-deductible. In your final VAT return of the year, you have to declare the VAT paid for the private use of:
- Business car
- Gas, water, electrics and phone
- Business goods
Correct mistakes in your next VAT returnMistakes happen; for instance, you may have overlooked an invoice in your latest VAT return. It’s not a problem. You can correct the mistake in your next VAT return, if the difference in the amount you have to pay or are due to receive is less than €1,000. If it is more, you’ll have to file an additional return, a so-called Suppletie-aangifte, to be found in the encrypted entrepreneurs’ environment on the website of the Tax and Customs Administration.
Find out if you are eligible for special VAT arrangementsThe Netherlands applies special VAT arrangements to:
- Profit margin arrangement: if you deal in second-hand goods, you may be eligible for this arrangement, and only have to pay VAT on the difference between the sale price and the purchase price.
- Travel agency arrangement: If your services are eligible for the travel agency arrangement, you pay VAT on the profit margin for travel services, instead of on the total price.
- Reverse-charge arrangement: Under the reverse-charge arrangement, you do not charge VAT, but reverse-charge it to your buyer.