VAT return (sales tax)

What is VAT declaration?

Every businessman is obliged to pay VAT (sales tax) on the added value of products or services. This is done via the VAT return. In this return, you indicate how much VAT has been settled and remitted on business expenses and investments. The difference determines whether you, as an entrepreneur, have to pay VAT or get a refund. In most cases, you submit the return on a quarterly basis. A monthly or annual return is also an option.

Difference between VAT and sales tax

The terms 'VAT' and 'sales tax' have the same meaning. In practice, you see that these terms are often used interchangeably. Official documents often refer to sales tax, when it is more simply called VAT.

VAT rates in the Netherlands

In the Netherlands, we have three VAT rates

• 21% (the standard rate). This rate applies to most goods and services. From electronics and software to
• 9% (reduced rate). This applies to food, books and medicines, among others. Through this low rate, the government wants to keep such products as affordable as possible.
• 0% (zero rate). You use this zero rate in situations where the VAT liability is shifted abroad. Think here of the export of goods.

Exempt from VAT

For certain sectors, a VAT exemption. This happens in healthcare, education and certain financial services. In these cases, you do not have to charge VAT to customers. But at the same time, as an entrepreneur, you are also not entitled to deduct VAT on business expenses and investments.

VAT transferred

At the 'reverse charge mechanism' shifts the obligation to remit VAT from the supplier to the customer. So that means that you do not pay VAT yourself, but the customer does so in his or her VAT return. This arrangement is often used in the construction industry, the lending of personnel and in international trade.

On the invoice, clearly state 'reverse charge VAT' along with the customer's VAT number.

The small business scheme (KOR)

If your annual turnover remains below €20,000 then you can opt for the KOR (small entrepreneurs scheme). In that case, you do not have to charge VAT. You will also then not have to file a VAT return and makes administration easier. But beware. You are also not allowed to deduct VAT on business expenses in this case. This scheme applies for a maximum of three years. It expires when you exceed the €20,000 limit.

VAT return: when to do it in 2025?

Most business owners file quarterly returns. For 2025, by quarter, these are the deadlines for declaration and payment.

Both the declaration and payment must be in by the deadline. Take into account a processing time for transfers. You can read more about this at VAT declaration. 

Doing monthly or annual VAT returns?

Actually, the Inland Revenue determines how often and when you have to file VAT returns. This is often once a quarter. Do you structurally pay more than €15,000 per quarter? Then the tax authorities may oblige you to file a monthly VAT return. Filing a VAT return once a year is possible if you do not pay much VAT (less than €1883 per year). When you register, the tax authorities determine how often per year you pay VAT. Nevertheless, you can also request a change yourself.

How to file VAT returns as a self-employed person?

You file your VAT return via the entrepreneur portal of the Tax and Customs Administration. To do this, self-employed people log in with DigiD. Careful preparation is important. Make sure your invoices, receipts and records are complete and correct for the relevant period. The following steps give you an overview of how best to go about this:

1. Go to My Tax Business and log in.
2. Select the appropriate time period.
3. Enter the turnover, the correct VAT rate and how much VAT you have charged.
4. Then give how much VAT you paid on business expenses (input tax).
5. Then check your own details and file the return.
6. Finally, you pay the amount due via iDEAL or manual transfer.

And have you not made any turnover? Then you still have to file a zero declaration. This avoids penalties.

Preload

You can deduct the VAT you pay on business expenses from the VAT you charge your customers. We officially call this preload. This deduction is only allowed for business expenses and when you generate VAT-regulated turnover yourself. VAT on private expenses or expenses related to exempt turnover are not subject to input tax.

Tips for VAT returns

The following practical tips will help you avoid mistakes and stress around your VAT return.

• Note the return deadlines in your diary or use the Inland Revenue's VAT Alert app.
• Put the VAT received in a separate account, that way you won't face any surprises.
• Make sure your records are in order and keep all records for at least seven years.
• Consider using accounting software or engage an accountant if you find tax returns too complex.

Error in your VAT return

Of course, it can happen that you make a mistake in your VAT return. Perhaps you overlooked an invoice or simply entered an incorrect amount. It is then important that you correct this mistake as soon as possible. Depending on the size of the difference, there are two ways you can correct it. For example, via a correction in your next return or via a separate supplementary statement.

A small correction (up to €1000)

Smaller errors under €1000 you may correct in the next declaration. So you do that, for example, if you have declared €500 too much or too little.

Supplements (above €1000)

For larger differences (above €1000), you need a filing a supplementary declaration. You do this easily via the Tax and Customs Administration portal. In it, you state the period you are correcting and then fill in the correct details. After submission, you will receive a refund or an additional tax assessment. A voluntary correction usually does not result in a fine.

VAT return late or forgotten?

Late VAT returns or payments can have unpleasant consequences. Here are the possible penalties:

• A post-tax assessment based on an estimated VAT amount
• Penalty for late declaration (€82 each time)
• Penalty for late payment (3% of the amount, with a minimum of €50)
• Calculation of recovery interest
• Loss of administrative reliability of your business

In that case, submit your tax return as soon as possible and pay immediately. If you disagree with the fine or assessment, you can object within six weeks.

Frequently Asked Questions