Is VAT deductible if there is no VAT payment?

[PatriciaWilliams]

Our company started on July 1st and this month we have to file VAT first.

 

We did not receive any earnings in the previous quarter, but we have made different charges. Can we now receive this paid VAT or should we have income against it first?

 

And what happens to us before 1 July, can we still receive this VAT?

 

Should we also apply for small business arrangements because we will not receive VAT back?

 

[Bert.]

Our company started on July 1st and this month we have to file VAT first.

2017??

[Branko Collin]

Can we now receive this paid VAT

 

Yes.

 

or should we have income against it first?

 

No.

 

And what happens to us before 1 July, can we still receive this VAT?

 

If you have to report VAT over the Q2 2018, even if that VAT is 0 euro, you can ask the VAT back that you paid in this quarter.

 

Should we also apply for small business arrangements because we will not receive VAT back?

 

There are two different regimes: one where you are not allowed to charge VAT (f.ex. educational institutions) and one where you charge 0% VAT (f.ex. companies that do business abroad). The former is not allowed to ask VAT back, the second is. The first regime is called vrijgesteld.

 

It is not as black and white, for example educational institutions may also provide services that are taxed with VAT.

 

A third reason for not receiving VAT back would be if you weren't not making enough money (turn-over). In that case the belastingdienst could conclude that you are not a serious business and unregister you as a business that should pay VAT. In that case you can also no longer receive VAT back.

 

Do any of these situations apply to you?

 

There are two small business arrangements, one is called Kleine Ondernemersregeling (KOR, literally small business arrangement), under which you pay a smaller sum or no VAT at all, the other is called Ontheffing van Financiele Verplichtingen, which means you do not even need to keep books. Whether the latter is wise can be debated.

 

Have you read the Handboek Ondernemen?