End-of-year turnover tax tips

Business owners who wish to rectify their value-added tax return or report a turnover tax related balance sheet item in connection with 2017 should do so – using the special supplementary return filing form which is available from the Tax and Customs Administration’s web site – before the first of April 2018 if they want to avoid being charged interest on tax. Adjustments totalling less than one thousand euros each may be incorporated in the next regular value-added tax return.

Remember to factor in your private use

Value-added tax on your private use of business-owned resources is required to be paid as part of your tax return for the final quarter of 2017. A scheme is available for the private use of the company car involving your making a fixed payment in the amount of 2.7% of the vehicle’s list price. Rather than applying the fixed scheme, you have the option – which could work out to your advantage – of paying value-added tax on your actual use of the company car.

• Pointer: Company cars that have been in use with the business for a total of five years including the year of their first use come under a reduced 1.5% fixed fee scheme. If you never deducted value-added tax at the time the car was first purchased, your assumption of having met the criteria for admission to the reduced fixed fee scheme would be justified.

Do not overlook your input tax credit adjustment

Value-added tax on business assets qualifies for deduction proportionately to the extent to which the assets in question are deployed in connection with activities that are liable for value-added tax. Your past deduction (if any) of (some of) the value-added tax on business assets will prompt adjustment of the tax credit in line with the change in the extent of deployment in connection with activities charged with value-added tax. The adjustment term for immoveable properties amounts to nine years compared with a four-year term for moveable items of property, not including the year of initial use in either case. In so far as 2017 has seen you intensifying your use of a particular business asset in connection with tax-exempted operations, this will call for your inclusion of the adjustment tax in your final value-added tax return for the current year. If the change in the use of the business assets has resulted in your having filed for insufficient input tax credit, this will entitle you to a value-added tax rebate. Here too you need to include the relevant adjustment in your final value-added tax return for the current year.

Application for value-added tax refund relating to bad debts

The need for filing a separate application for each refund of value-added tax you once charged as part of what has since turned out to be a bad debt was dispensed with in 2017. It is permissible under the new rules to deduct the amount of the refund in your periodic tax return, as soon as it has been established that chances of the debt belatedly being settled have dwindled to the point of near non-existence (which in any event cannot be within the first year of the due date of your original invoice). You may incorporate your application for value-added refund for unpaid invoices dating back to before 2017 in the first value-added tax return you file in 2018. In the somewhat unlikely event of any of these unpaid invoices being settled up at a later stage, this will obviously prompt your repayment of the corresponding value-added tax component to the Tax and Customs Administration. Any outstanding invoices raised with yourself in 2016 or previous years may call for your payment to the Tax and Customs Administration of the value-added tax component as part of the first value-added tax return you file in 2018.

Dutch version: Eindejaarstips omzetbelasting