Businesses and organisations that have paid sums to third parties must report these to the Tax and Customs Administration. For sums paid out in 2020, this must be done before 1 February 2021.
Mandatory?
We use the verb “must”. In our article Statement of amounts paid to third parties In 2016, we stated that this obligation cannot be inferred from the law. The declaration therefore does not need to be made unsolicited.
This is likely to change soon. The Government has, in fact, proposed to provide a legal basis for this obligation to provide information.
The importance of this is clear. This income must generally be declared by the recipient as income from other activities in their income tax return. The Tax and Customs Administration can use the information provided to check whether this income has been declared. The reported data is included in the pre-filled tax return (VIA).
Accounting officers
The obligation to provide information will be given a legal basis for the following parties subject to administrative obligations:
- withholding agents, as defined in the Payroll Tax Act;
- collective management organisations (organisations which, on behalf of a group of rights holders and on a not-for-profit basis, collect remuneration for copyright or related rights).
What sort of income?
The duty to provide information applies not in respect of payments to a natural person who:
- has worked as an employee, an artist or a professional sportsman or sportswoman, or as a member of a foreign troupe (this income is reported to the tax authorities via the payroll system);
- has worked as a volunteer and the remuneration does not exceed the maximum amount set out in the volunteer scheme (see our factsheet (regarding the volunteer scheme);
- has issued an invoice in respect of the work, as referred to in the VAT legislation, which states the VAT amount;
- has received a payment as a beneficiary of income from copyright or related rights.
What data?
The declaration can only be submitted electronically. To do so, you must use the special data portal used by the Tax and Customs Administration. The following information must be provided:
- the name, address and date of birth of the recipient of the payment;
- the total of the amounts paid to the recipient during the calendar year (including expense allowances).