Charging VAT

[DevinUD]

Hello People, 

 

I just opened my kvk and read as much as possible about my business and the finance in order to be legit with tax etc.  

My company is one man operation (sole proprietorship) that sells services to  others like me or bigger companies. 

My services is a product that later my clients will intergrade to their product in order to sell to consumers. So it is safe to say that my business is B2B?

What I do not understand yet  and it is not clear around documents and online (KVK etc) if I have to include VAT in my services. 

1. In which cases do I charge VAT?

2. Is there an appendix for that?

 

Kind regards 

Devin.

 

[Bert.]

 

8 uur geleden, DevinUD zei:

My services is a product that later my clients will intergrade to their product in order to sell to consumers. So it is safe to say that my business is B2B?

What I do not understand yet  and it is not clear around documents and online (KVK etc) if I have to include VAT in my services. 

 

 

If your clients are companies with a VAT-number than it's B2B. A product, i,e. an tangible good,  is not a service.

 

https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/business/vat/vat

[Roel J]

18 uur geleden, DevinUD zei:

1. In which cases do I charge VAT?

 

When doing business within the Netherlands all deliveries of goods or services need to have 21% VAT on it. That is the normal rule.

Only if your goods or services are listed for a different rate you are allowed to charge a different rate. For a list see the link below
 

If you deliver goods or services outside the Netherlands then you may need to use the reverse charge rules where you do not put a VAT rate on your invoice. But that requires for your customers to provide you with a EU VAT ID for their company which you need to verify to be sure you can apply reverse charge.
For any one that does not provide you with a VAT ID you have to follow the normal Dutch rules for VAT on your product or service.

 

18 uur geleden, DevinUD zei:

2. Is there an appendix for that?

Yes below link has a list of goods and services that are allowed a different rate or ar Exempted (vrijstellingen) from VAT

https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/zakelijk/btw/tarieven_en_vrijstellingen/

 

The list describes types of goods and services so not exact products or services.

If your product or service is not on the list you charge 21% VAT.

 

[Maxn]

3 uur geleden, Roel J zei:

For any one that does not provide you with a VAT ID you have to follow the normal Dutch rules for VAT on your product or service.

Note that the TS mentioned digital product in his other thread:

 

Quote

My business will sell business to business digital product.

If what he is selling meets the definition of an electronic service, and his foreign customer is not VAT registered, it is taxable in country of customer at VAT rate of country of customer.

At least if he sells for more than 10k a year to that group.

[DevinUD]

4 hours ago, Roel J said:

 

When doing business within the Netherlands all deliveries of goods or services need to have 21% VAT on it. That is the normal rule.

 

 

 

Hello Roel and thank you for the feedback If I may to ask some follow up questions.

 

What I am very confused with probably is :

If  I make an offer to a client do I state the price exclude VAT?

Then then in the invoice that I will make for my client I will add the VAT? 

If so then he pays the VAT to me and I pay from my income the VAT to belastingdienst, is not that a double taxation on the service?

Where to I got the mistake and confusion???

 

Kind regards,

Devin.

[RubenT]

5 minuten geleden, DevinUD zei:

If  I make an offer to a client do I state the price exclude VAT?

That is correct. Make sure that it is clear for your client that your offer is excl. VAT.

 

6 minuten geleden, DevinUD zei:

Then then in the invoice that I will make for my client I will add the VAT? 

That is also correct. You have to charge the Value Added Tax.

 

7 minuten geleden, DevinUD zei:

If so then he pays the VAT to me and I pay from my income the VAT to belastingdienst

You have to pay the VAT to the Belastingdienst (tax authorities) that you collected from your client (as mentioned in your question above this one). But you don't pay Value Added Tax on your income, you pay Income Tax (inkomstenbelasting) on your income. VAT is taxation of a product or service, Income Tax is taxation of your income.

[Rik ·]

15 minuten geleden, DevinUD zei:

If  I make an offer to a client do I state the price exclude VAT?

If you offer is business to business you can state the price excluding VAT and add a line at the bottom that prices are excluding VAT (which will be added when the invoice is sent).

 

Quote

Then then in the invoice that I will make for my client I will add the VAT? 

When you create the invoice for B2B the VAT needs to be clearly indicated. Not added to the offer price.

 

Quote

If so then he pays the VAT to me and I pay from my income the VAT to belastingdienst, is not that a double taxation on the service?

Where do you see double taxation. The client pays the VAT to you and you pay the VAT to the belastingdienst. So there is only one taxation of VAT (which goes 'through' you).

 

Edit: RubenT beat me to it 

 

30 oktober 2020 aangepast door Rik ·

[Roel J]

10 uur geleden, Maxn zei:

Note that the TS mentioned digital product in his other thread:

 

I was not trying to tell him what to charge for VAT in his situatien. I simply do not have enough info for thar. I was trying to explain how the VAT works.

Digital services is only one of the many exceptions to the main rule of charging 21% VAT on your sales.

 

As a new business owner it can be a bit of a challenge to get it all right.

But in the end you normally only deal with a few of the VAT rules and then it becomes quite clear what to use under what circumstances.

 

At risk of a triple answer..

9 uur geleden, DevinUD zei:

What I am very confused with probably is :

If  I make an offer to a client do I state the price exclude VAT?

For B2B you make quotations excl vat.

For B2C customers you MUST list prices including VAT.

 

VAT is always the last thing you add after you done all your calculations of what something would have to cost.

 

9 uur geleden, DevinUD zei:

Then then in the invoice that I will make for my client I will add the VAT? 

Yes when you invoice your customers it is time to determine what VAT rule applies for this transaction and if you have all the information you need to apply that rule. (like having the VAT ID for applying reverse charge to EU deliveries

 

9 uur geleden, DevinUD zei:

If so then he pays the VAT to me and I pay from my income the VAT to belastingdienst, is not that a double taxation on the service?

Where to I got the mistake and confusion???

It is a common confusion.

 

If your price ex VAT is 1000. then incl 21% is 1210 euro. youir customer pays 1210 euro to you

also you have 300 purchase costs ex VAT for that sale (so 363 incl)

 

on your VAT tax return you have to pay 210 but you can also ask back VAT on purchases so 63 euro. So in the end you pay 147 euro for VAT to Tax office.

 

But for your income tax you have 1000 revenue and 300 cost, making a profit of 700 so you pay income tax over the 700 (not counting any general deductions you get on total income)

So no double taxing and only the income tax comes out of your pocket..