Any app developer to share experiences about taxation in the Netherlands?

[Sertac]

Hi to all,

 

We are a small audio software developer. We sell our software through larger digital audio workstation developer companies. The business model is comparable to Apples App store model and we are at a similar position of an app developer.

 

We are a bit confused what to do in terms of taxing. We understand we won't pay BTW but we will pay inkomenbelasting. However as we do not pay BTW do we count as ondernemer and benefit from heffingskortingen for ondernemers? What is the usual practice? If there any companies who share the same we would love to connect and share experiences. Our any link regarding this would be much appraciated.

 

Sorry for English language, still in theprocess of getting used to Nederlands. ;)

 

Regards,

Sertac

 

[Joost Rietveld]

Hi Sertac,

 

You claim that you don't have to pay any BTW (or VAT, value added tax, in English). How did you come by this idea? Nearly all entrepreneurs in The Netherlands have to pay VAT.

 

And the VAT in itself is not even linked to the income taxes. These are separate tax laws with very different rules and requirements.

 

Our government has provided information about Dutch taxes in English. For VAT, see this link and for income taxes this link.

 

best regards

Joost

 

 

 

 

[Iwan van Geelen]

Some useful links in English ...

 

http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/business/

 

http://www.agentschapnl.nl/en

[Sertac]

You claim that you don't have to pay any BTW (or VAT, value added tax, in English). How did you come by this idea? Nearly all entrepreneurs in The Netherlands have to pay VAT.

 

Hi Joost,

 

Thanks for the links. I appreciate it.

 

The thing is we sell our products through a company based in another EU country. VAT is paid at the location of purchase. It is already paid in this particular EU country. That is why I claim we do not pay BTW tax to Dutch state but income tax.

 

Regards,

Sertac

 

 

[Raoul K]

To give an accurate awnser we need to know

 

-where is the company located

-what kind of company (privately held, or some limited or?)

-where do you live fiscally

 

[Sertac]

Hi Raoul,

 

Thanks for asking clarification.

 

The company is an eenmanszaak founded in NL. I am located in NL too. But our currently sole customer is located in another EU country, which sells our products over their own website.

 

 

[Erik-]

The thing is we sell our products through a company based in another EU country. VAT is paid at the location of purchase. It is already paid in this particular EU country. That is why I claim we do not pay BTW tax to Dutch state but income tax.

 

Right, that sounds like a intra-community transaction. There's a notable difference between VAT not applying to your company or services (vrijgesteld) or VAT applying but resulting in you not having to pay anything. The latter is the case for you: you will still have do all the proper VAT filings. For this sale, you list the correct amount as services provided to companies in other EU countries (question 3b). In addition, you'll need to file a aangifte intracommunautaire prestaties or aangifte ICP, where you list the VAT numbers and total amounts for all transferred VAT. In your case, that would only be a single entry, as you delivered services to only one customer.

 

However, because you transfer the VAT, you will not actually have to pay anything to the tax authority for this particular case, for VAT. There is nothing unusual about that.

 

Also, make sure to follow the guidelines for the invoices: state on the invoice that VAT is transferred, make sure their VAT number is valid, and add their VAT number to the invoice.

 

Income tax has no relation at all to your VAT.

[Iwan van Geelen]

As I see now you deliver your goods to an other (third party) company in the EU. And you will not invoice the enduser.

 

The solution is to sell your goods via the system of "VAT exempt intra community supplies of goods"

 

You will need the VAT Number of this third party and state this on the invoices. In the Dutch TAX/VAT Returns you have to declare this.

 

More on the official website:

http://ec.europa.eu/taxation_customs/taxation/vat/traders/intra_community_supplies/index_en.htm

 

Update:

 

have also a look at the Belastingdienst

[Raoul K]

shifted vat, if your customer (must be a company, no consumer!) has a valid tax ID, you can shift VAT to him

 

 

but what "worries" me more is having only 1 customer, simply put, its not allowed!

[Iwan van Geelen]

shifted vat, if your customer (must be a company, no consumer!) has a valid tax ID, you can shift VAT to him

 

 

but what "worries" me more is having only 1 customer, simply put, its not allowed!

 

No stress! You can have 1 customer I don't see or know 1 reason for "why not"

[Sertac]

Hi,

 

Thanks to all for your answers so far.

 

I am not sure if it is not allowed. But I know it does not fit to the criteria of "ondernemerschap". That means we cannot benefit from these nice heffingskortings but this is a side job, so I would not be able to claim it anyway. Maybe you are confusing these two?

 

As for the income tax, I am still puzzled. Having this as the second job, I guess since this is a "eenmanszaak" the income from this job would top up my income from my day job and I have to pay from a higher tax band. Is this true? Or do you count the company as a separate legal person and pay income tax from the lowest band?

[Joost Rietveld]

I am not sure if it is not allowed. But I know it does not fit to the criteria of "ondernemerschap". That means we cannot benefit from these nice heffingskortings but this is a side job, so I would not be able to claim it anyway. Maybe you are confusing these two?

 

Having only one customer, particularly abroad, is no problem. It is not as if the Dutch Tax Offices can levy salary tax from a foreign company ;)

 

The 'heffingskortingen' do not have a link with your business. These are deductions an taxes payable. Your employer should have applied these deductions on your salary taxes.

 

What you are thinking of are the entrepreneurs tax credits. Those only apply for entrepreneurs who meet the Tax Offices' standards (for example a minimum of three clients) and work for their company for at least 1,225 hours per year.

 

As for the income tax, I am still puzzled. Having this as the second job, I guess since this is a "eenmanszaak" the income from this job would top up my income from my day job and I have to pay from a higher tax band. Is this true? Or do you count the company as a separate legal person and pay income tax from the lowest band?

 

Your first remark is indeed true. Income from labour, whether or not deriving from self-employment or as an employee, are taxed on top of each other. This will mean that the income from your 'eenmanszaak' is taxed in the same or a higher bracket than the top of your income from employment.

 

best regards

Joost

[Iwan van Geelen]

We have a progressive tax system with different income tax brackets. So when you exceed a level you have to pay a higher percentage income tax ONLY for the amount (sum) for that "portion" The first (lower) incomes stays in the first bracket.

 

Belastingdienst