Avoid an additional VAT assessment

Most entrepreneurs in the Netherlands have to file a VAT return every 3 months. A failure to do so results in a naheffingsaanslag (additional VAT assessment): a fine, plus an estimate of how much VAT you need to pay to the Belastingdienst. How do you avoid this, and what can you do if you do receive an additional assessment?

Products and services are subject to value-added tax (VAT, BTW in Dutch). You charge VAT to your customers and pay it to the Belastingdienst (Tax Administration). Most business owners must file a VAT return every 3 months. Some file monthly or annual returns. The Belastingdienst will tell you how often you have to file a return.

When do you get an additional assessment?

If you fail to file a return or file a late return (more than 7 days after the deadline), you will receive a naheffingstoeslag, as the additional assessment is called in Dutch. If you filed your return on time but paid no VAT or too little VAT (in Dutch), you will also get an additional assessment. An additional assessment always comes with a fine. The fine for failure to file or missing the filing deadline is €68. The fine for non-payment, underpayment or late payment (payment default) is anywhere from €50 to €5,514.

Sometimes, business owners mistakenly believe they do not have to file a sales tax return. But beware, because you must also file a tax return if you:

• Did not charge VAT.
  You always have to file a return, even if you do not have to pay any VAT. This is also known as a nil return.
• Dissolved your business.
  It may take a while for the Belastingdienst to strike you off their list of entrepreneurs. If you get a notice to file a return after you dissolved your business, make sure to file the return. If you not longer have to pay VAT tax, file a nil return.
• Do not have any turnover yet.
  As soon as you start your business, you have to file tax returns and pay taxes. Usually, that will also mean filing quarterly tax returns. The Belastingdienst will inform you when you need to file your first VAT tax return. You will usually have to file your first VAT tax return on paper.
• Paid VAT, but never received a letter from the Belastingdienst saying you have to file a VAT return.
  If you are subject to VAT but never received a notice to send in a VAT tax return, call the Tax information line.
• You want to make use of the Small Business Scheme (KOR) (in Dutch).
  Because you cannot opt into the Small Business Scheme without a VAT number, the start of the scheme will not coincide with the start of your business. Until you receive confirmation that you have been enrolled in the scheme, you have to file VAT tax returns.

Some goods and services are exempt from VAT (in Dutch). Even if your goods and services are exempt, check if the Belastingdienst expects a tax return from you. If they do, you must file it.

Important: you have to transfer the VAT you owe the tax authorities to the account of the Belastingdienst yourself. You will not get an assessment or an invoice.

How do you avoid additional assessments?

You can avoid an additional assessment by filing your VAT return and paying the VAT on time. Even if you do not have any turnover yet, you still have to file a return. Most entrepreneurs have to file quarterly returns. The deadlines for quarterly returns are:

• 30 April for the first quarter
• 31 July for the second quarter
• 31 October for the third quarter
• 31 January for the fourth quarter

Important: if your company has any legal form other than eenmanszaak (sole proprietorship), you will need eHerkenning to file tax returns. eHerkenning is like DigiD, but for businesses. Apply for eHerkenning long before you return is due, because you cannot file a return without it.

Oops, I missed the deadline

What if the deadline passes and you still have not filed a return? You have up to 7 calendar days after the deadline to file your return. If you file your return within those 7 days, you will not be fined.

What if you still get an additional assessment?

In some cases, you may still get an additional assessment. The Belastingdienst will then estimate how much VAT is due, because they cannot know how much VAT you actually charged and paid. As a result, the amount of the additional tax assessment is often much higher than what you actually owe. 

If you file a VAT return after the additional assessment, you usually will not have to pay the full amount. The Belastingdienst will simply adjust the estimate. However, you will still have to pay the fine for failing to file a return.

What you can do (Belastingdienst website) after you receive an additional assessment depends on your situation.  

Can you object to an additional sales tax assessment?

If you believe you were wrongly sent an additional VAT assessment, use the Naheffingscheck (in Dutch). In certain cases, for example if you were hospitalised, you can object. To object, submit the form ‘Bezwaar Omzetbelasting’ (VAT objection) in Mijn Belastingdienst Zakelijk.