If you are a business owner, you are required to keep accounts. This obligation is set out in Article 52 of the General Tax Act.
Accounting officers
The record-keeping obligation does not apply solely to business owners. The Act uses the term person required to keep records. All legal entities (such as a public limited company, private limited company, co-operative, foundation or association) are required to keep accounts. This also applies to natural persons who:
- run a business or practise a self-employed profession;
- be required to make deductions (for payroll taxes);
- carry out a task (result arising from other activities).
Administration
The law does not specify exactly what form your records should take. However, it does stipulate that you must keep records of the financial position of your business, profession or activity (and retain this information) in such a way that your rights and obligations are evident at all times, together with all other information relevant to the assessment of tax.
In addition, the records must be organised in such a way that the Tax and Customs Administration can audit them within a reasonable timeframe. And as a person required to keep records, you must assist the Tax and Customs Administration in this by providing an overview of the structure of your records.
Word or Excel
The Amsterdam Court of Appeal has recently case This issue was raised in relation to a law firm. In that case, the Tax and Customs Administration advised the business owner, who kept his records in Word, on the options available for accounting software and on maintaining records using Excel. The Tax and Customs Administration also asked the business owner to submit his records in a format that could be audited.
When the business owner failed to comply, an information notice was issued. The Tax and Customs Administration has deemed the Excel files subsequently submitted to be insufficient. The accounts have been rejected and the burden of proof has been reversed.
The Amsterdam Court of Appeal has ruled that this is justified. The Word files contain only the amounts of the costs incurred, without payment dates, suppliers’ names or descriptions. Furthermore, no distinction was made between business and private expenditure. There are significant, unexplained discrepancies between the Word and Excel files provided.
Source of information
The way you organise your accounts depends on the nature and scale of your business activities. For many business owners, bookkeeping is not merely a matter of complying with a legal obligation, but above all an important source of financial information. Self-employed individuals, on the other hand, can usually make do with much simpler records, which must, of course, meet the minimum requirements.
And sometimes you keep records (more or less) of your own accord. For example, to keep track of the costs and income from your investment properties. Or because you are required to provide financial accountability for an estate that you manage.
VWGNijhof We are happy to help you set up, maintain and manage your financial records, whatever their purpose may be. We also offer tools which allows you to monitor and adjust the performance of your activities.