As an entrepreneur it’s very important to keep your administration up to date since you have to fill in your annual income tax return yourself, and file VAT returns. But what exactly is a VAT return? Are all entrepreneurs obliged to submit a VAT return? How often should you file a VAT return, and how? And is it something you’d be able to outsource?
What is a VAT return?
VAT is the abbreviation of value added tax, or turnover tax. Unless you are exempt from VAT, every entrepreneur is legally obliged to charge VAT and to pay that VAT to the tax authorities. Through the VAT return, you inform the Dutch Tax and Customs Administration of how much VAT you’ve charged to your customers over a certain period. In addition, you indicate in the VAT return how much VAT you’ve paid for services or products for your company (for example through purchases or business investments such as a laptop) during that period. The VAT you’ve paid is deducted from the VAT you’ve charged. The difference is the VAT that you have to pay.
Is the VAT return mandatory for me?
When the Dutch Tax and Customs Administration has determined that you’re subject to VAT as an entrepreneur, you’ll automatically be notified. Almost all entrepreneurs are subject to VAT, but there are a few exceptions. For example, if you meet the conditions of the small business scheme (KOR). In that case you can request an exemption from the VAT return from the Dutch Tax and Customs Administration. You will also not have to file a VAT return. If you’re exempt from VAT, you don’t charge VAT on your services and you’re also not allowed to deduct VAT on business expenses. You may also be exempt from VAT if you provide services in, for example, healthcare and education. However, it’s advisable to always check this first, because sometimes you do have to charge VAT on certain services.
How often do I need to file a VAT return?
Most entrepreneurs file their VAT returns quarterly. It’s also possible to do it monthly or annually, but in those cases you must request this with the tax authorities first. For this you have to meet certain conditions.
How do I file a VAT return?
If you choose to file your VAT return yourself, you have two options:
- Manually transfer the data from your own administration into the online declaration form of the Dutch Tax and Customs Administration;
- Use accounting software that automatically fills in your VAT returns and sends them to the tax authorities.
Why would you outsource the filing of your VAT return?
Filing a VAT return is a job that can cause quite a few frustrations for many entrepreneurs. In addition, it’s something that must be done periodically, usually several times a year. If you want to save yourself periodic worries and rest assured that your declarations are submitted correctly and on time, please feel free to contact Kees de Boekhouder for more information about outsourcing your VAT returns. Or make an appointment for a (virtual) introductory meeting.