VAT return explained for (starting) entrepreneurs

You calculate turnover tax (VAT) on the supplies and services you provide. You file a return monthly, quarterly, or annually — depending on turnover — no later than the last day of the month following the period. 2024 rates: 21% standard, 9% reduced, 0% exempt. Small business owners with a turnover of less than €20,000 can opt for the KOR (VAT-free but no deduction). Below: how the return works, what needs to be included, and how Karim's start-up operating company reclaims VAT in its first year.

The short answer

• Filing frequency: monthly, quarterly or annually — Tax and Customs Administration determines based on turnover.
• Rates 2024: 21% standard, 9% reduced, 0% exempt.
• Deadline: last day of the month after the period (May 1 for Q1).
• Small Business Scheme (KOR): turnover < € 20,000 → opt for VAT exemption.
• VAT number: you receive this upon registration with the Chamber of Commerce — listed on the website (NL000000000B01 format).

Who is liable for VAT?

Almost every entrepreneur in the Netherlands is subject to VAT (Art. 7 VAT Act). Exceptions:

• Education and care: exempted under conditions.
• Financial services: exempt.
• Some sporting and cultural activities.
• Small Business Scheme (KOR) — choice for exemption.

Being liable for VAT means: calculating, collecting, and remitting to the Tax and Customs Administration. But also: reclaiming VAT on purchases (input tax).

Rates 2024

• 21% (standard rate): most supplies and services — computers, advice, software, clothing.
• 9% (reduced rate): food, books, public transport, hairdressers, bicycle repair shops, restaurants.
• 0% (exempt): exports outside the EU, intra-Community supplies, certain international services.
• Excluding VAT: education, healthcare, financial services — no VAT, no input tax deduction.

Karim's software agency charges 21% on its services — the standard rate for IT work.

Reporting frequency

The Tax and Customs Administration determines frequency based on estimated turnover:

• Monthly: for large VAT flows (turnover > €7,000,000 or many shifts).
• Quarterly: most common for SMEs.
• Annually: for very low turnover — exception, upon request.

Deadline: no later than the last day of the month following the period. For Q1: May 1. For January: February 28. Late: default penalty + interest.

How do you file a VAT return?

Via Mijn Belastingdienst Zakelijk or your accounting package (direct connection). Content:

1. Turnover 21%: turnover excl. VAT + VAT due.
2. Turnover 9%: same for 9% rate.
3. Turnover 0%: exports, intra-Community supplies.
4. Input tax: VAT on purchases, costs, investments — reclaimable.
5. Balance: payable to the Tax and Customs Administration, or to be received back.
6. Other sections: intra-Community services, VAT outside the EU.

In case of positive balance (VAT due): pay. In case of negative balance (VAT refund): receive back into account.

The Small Business Scheme (KOR)

For entrepreneurs with a turnover of less than €20,000 per calendar year:

• Opt voluntarily for KOR — no VAT on invoices, no tax return.
• Disadvantage: no deduction of VAT on purchases (input tax).
• Valid for 3 years, with possible renewal thereafter.
• Register via the Tax and Customs Administration — before the start of the calendar year.

Smart for freelancers with private clients or exempt services (healthcare, education). Less advantageous for B2B work — input tax weighs heavily.

VAT number and invoices

Every VAT-registered entity receives a VAT number (NL000000000B01 format) upon registration with the Chamber of Commerce. Mandatory on:

• Invoices to customers.
• Website (for webshops).
• Letterhead and business cards (recommended).

International VAT check: for intra-community supplies, check the recipient's VAT number via VIES (EU system).

reclaim input tax

VAT is deductible on business purchases (provided they are for taxable transactions):

• Computers, software, office supplies — fully deductible.
• Company car — 50% VAT deduction for private use, except for electric cars.
• Food and drink (representation) — 21% but 73.5% deductible in income tax/corporate tax.
• Investments in property — reviewed over 10 years (VAT revision period).

Karim's start-up operating company invests €50,000 in computers and software → €10,500 VAT back in first VAT return. Liquidity advantage without comparison.

Honest recommendation

VAT returns are largely routine work using good accounting software (Moneybird, Exact, Yuki) — integration with the Tax and Customs Administration makes it simple. For start-up entrepreneurs: make a conscious choice between the Small Business Scheme (KOR) and regular VAT. For B2B work and investments: regular VAT is almost always more advantageous (input tax). For international deliveries: be careful regarding intra-community rules, otherwise corrections will be required afterwards. A good bookkeeper costs €75 – €150 per quarter — well worth the money.

For other topics: which taxes does a BV pay, corporate income tax return and VAT fiscal unity.

Frequently Asked Questions