Keeping your international business records in order
- Sandra Visser-Meijer
- 24 May 2023
- Edited 27 Oct 2022
- 4 min
- Managing and growing
If your administration is in order, you can keep track of how your business is doing financially. When you do business abroad, the Dutch Tax Administration requires that you collect more information than you do for Dutch sales and purchases. For example, you have to put additional information on your invoice and retain extra proof for your VAT return.
When you do business internationally, your administration has to meet legal requirements (in Dutch). You work with different VAT rates, you list your foreign customer's VAT ID on your invoice, and retain proof of the export of your goods from the Netherlands. There are different requirements for trade inside or outside the EU.
Administration inside the EU
If you sell products and services to EU customers, you list your foreign customer's VAT ID on your invoice. You retain proof of the transaction for your VAT return. And if the sales exceed a threshold amount, you file an Intrastat report (in Dutch) with Statistics Netherlands (CBS).
VAT ID of foreign customer
There are legal requirements for invoices to Dutch customers. You need these for your VAT administration. For example, name and address of yourself and your customer, and your VAT id.
When you do business in other EU countries, you also list your customer's VAT ID on the invoice. Before you make a delivery to a customer in a different EU country, you check whether they have a valid VAT ID and are entrepreneurs (in Dutch) in a different EU country. If you put 0% VAT on your invoice and the Dutch Tax Administration finds out your customer does not file VAT returns themselves, you will have to pay VAT on the delivery yourself. The Tax Administration will send you an assessment for the amount (in Dutch).
The supply of products to business customers in other EU countries is called intra-community supply (ICP). After you have checked your customer's VAT id, you save a screenshot of these data in your records.
Your invoice has to contain additional data. You usually invoice an intra-community supply with the 0% VAT rate. You state that the delivery is an intra-community supply. To do so, you use the text: ‘tabel II, onderdeel a, post 6, Wet OB 1968’ or ‘artikel 138, lid1, Richtlijn 2006/112’. You decide which of these texts you use, and in which language.
You deliver the goods to other EU countries with 0% VAT. Your customer pays VAT in their own country. There are some exceptions to this, for example a so-called ABC supply chain. Or if your customer is a private inidividual, and does not run a business.
You must be able to prove (in Dutch) through your records that you transport goods to another EU country, and that the goods have left the Netherlands. You can prove this by retaining, for example:
- copies of freight bills / letters
- transport declarations for pick-up transactions (in Dutch)
- transport insurance policies
When you provide services to companies in other EU countries, your customers usually calculate the VAT themselves. They pay this VAT in their own country. You send an invoice without VAT. After checking your client's VAT ID you save a screenshot of the data in your records.
On your invoice, you state: 'btw verlegd' or 'VAT reverse-charged'. Other languages are also allowed.
For some services, different rules apply, because they are taxed in the country where the services are provided. For example, transport of individuals. This service is taxed in the country where you transport the individuals. The tax laws of that country then apply. Catering is another example, or services related to real estate.
Statistics Netherlands (CBS) approaches businesses in the Netherlands to make an Intrastat report (in Dutch). These are companies that do business with other companies within the EU. CBS uses random samples for this purpose. From 2023, there is no declaration threshold. Completing the declaration is mandatory.
Records outside the EU
Invoices for products exported to non-EU countries do not have to contain additional details. You draw up your invoice in a language that your customer understands. You charge 0% VAT.
When you provide services in a non-EU country, the service is often taxed in the country your customer is located in. Different rules apply for VAT and drawing up invoices in different countries. The Tax Administration offers a (Dutch only )tool: ‘Diensten in en uit het buitenland’ (Services to and from abroad) to help you figure out what you have to put in your invoice in which country, and where to file your foreign tax return.
Save proof of your transactions in your records, so you can show which goods you have imported and exported, if the Tax Administration asks you to.
You can use several documents to prove the export of goods from the Netherlands. The most common ones are:
- Customs documents you receive from Customs or your forwarding company. For example, the Confirmation of Exit (CoE): digital proof that your goods have left the EU.
- Correspondence with your foreign customer, like quotations and emails.
- Copies of transport documents.
When you import products, you do not make invoices, but receive them from your foreign suppliers. You do retain proof in your records (in Dutch), such as:
- Proof of payment(s).
- Customs documents you receive from Customs, like the confirmation of your digital import declaration.
- Copies of freight letters.
Keeping tabs on your international records
To have a clear overview of your international administration it is advisable to use accounting software or an online accounting solution. It helps you stay organised: all your invoices in one place, and quick insights into your foreign customers, suppliers, and VAT rates. For a complete overview, create several ledger accounts in your records.
You book invoices into a so-called ledger account in your records. A ledger account is a group of all the income and expenses of a certain part of your accounts. You define the groups into which you divide your records. By giving each group a unique account number, you create an orderly overview of the business you have done in the Netherlands, inside the EU, or outside the EU. And that is what the Tax Administration wants to see when they check your accounts.
€8,000 Turnover domestic
€8,100 Turnover inside the EU
€8,200 Turnover outside the EU
Your accountant or software supplier can help you partition your ledger accounts.
You create electronic invoices, or e-invoices in your accounting software. Next, you send the invoice to your customer in xml-format. Or you attach the invoice to an email.
EU countries have different rules for e-invoices. The Nationaal Multi-belanghebbenden Forum e-Procurement (NMBF) (in Dutch) can answer your questions about national rules in other EU countries.
If you do business with clients outside the EU, ask them if it is okay for you to send an e-invoice.