What does a negative VAT balance on your Balance sheet entail in the Netherlands?
For every entrepreneur there is a VAT balance. This balance reflects your current VAT status: t states a clean balance or a pending VAT to recover or to pay off. We explain why the latter, a VAT debt, is not always a reason to panic.
The state of affaires the VAT balance reflects, is generally based on the 31th of December and accounts for several (ongoing) VAT actions. Therefore, you should always bear the dynamic nature of the balance in mind. The following VAT actions can all influence the momentary balance status:
VAT compliance for the fourth quarter or for December. This VAT compliance will be filed after the fiscal year came to an end;
Uncompleted VAT payments of collections. These can also be of influence when the VAT is already filed. In addition, VAT from other EU-countries is only claimed after the year passed;
The supplement Tax, based on the current and/or the previous fiscal year. The latter is the case when your previous balance sheet was not accomplished or declared in time.
As soon as you discover a miscalculation in the filed VAT, you should declare the mistake in a Supplement Tax compliance. Supplement Tax is thus a correction, refiling taxes for a wrongly declared fiscal period. In this correction, you should mention the Income Tax you previously declared. Subsequently, the VAT amount due or the amount you are entitled of, will be rendered.
A timely revision of your filed taxes is of great importance, preferably with the assistance of a professional. When you do not file Supplement Tax in order to right a known wrong, the Dutch tax authorities will fine you. If they suspect you of malice, the fine can amount to 100% of the VAT to be rectified.
Nevertheless, the opposite situation occurs as well. Are you aware of wrongly declared VAT, you might not need to file Supplement Tax. Under Dutch law, Supplementation Tax compliance is not mandatory for corrections of less than EUR 1000 VAT. You should enter this correction in the next VAT compliance, though.
Please do not hesitate on contacting us for more information about VAT or taxes in general. DTS is pleased to assist you.
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