VAT return / Turnover tax return.
Value Added Tax (VAT) Services
Under the VAT system, entrepreneurs charge VAT to their customers, which is then remitted to the tax authorities through VAT or turnover tax returns. Entrepreneurs can offset the VAT they’ve paid themselves. If they’ve paid more VAT than they’ve received, they’re entitled to a refund from the tax authorities.
Standard VAT Rate and Exceptions:
The standard VAT rate of 21% is applicable to most entrepreneurs. However, there are exceptions, including exemptions, 0%, and 6% rates, such as for basic necessities like food and drink.
Who Pays VAT?
All entrepreneurs are obligated to pay VAT, unless exempted. Whether practicing a profession or conducting a business independently, you’re considered an entrepreneur for VAT purposes. Profit motive and legal business structure (e.g., sole proprietorship) do not affect this obligation.
When to submit VAT returns?
Turnover Tax Return Services
VAT-registered entrepreneurs are required to submit a turnover tax return every quarter, due within one month after the quarter’s end. Monthly returns can be arranged upon request. The tax authorities may enforce monthly returns as a penalty for consistent late filings or payments.
Small Business Scheme (KOR) in the Netherlands:
For businesses in the Netherlands with a turnover not exceeding €20,000 in a calendar year, the small business scheme (KOR) is available. This scheme is applicable to both natural persons (sole proprietorships or general partnerships) and legal entities such as foundations, associations, and BVs.
Key Features of the KOR:
The KOR provides a VAT exemption. Businesses meeting the eligibility criteria and opting for the KOR are no longer required to charge VAT to customers. Consequently, VAT returns are no longer necessary, and businesses cannot reclaim VAT on expenses and investments.
Abroad and VAT.
VAT and International Business
When conducting business with overseas customers, VAT implications depend on various factors such as whether your customers are entrepreneurs or private individuals, the nature of goods or services provided, and whether delivery occurs within or outside the EU. Additionally, there are extra administrative obligations and specific invoice requirements to fulfill. In some cases, tax returns may need to be filed in other countries.
For an initial understanding of VAT regulations concerning international transactions, you can refer to the Tax Authorities’ website. Feel free to reach out to us for further clarification or assistance with any questions you may have.