According to research by the magazine Brisk It appears that 1 in 13 VAT-registered businesses receives a supplementary tax assessment. Each quarter, the Tax and Customs Administration expects to receive 1.8 million VAT returns. Of these, roughly 140,000 are submitted late. This may relate to the submission of the return, the payment of the VAT due, or both. In over 80% of cases, the payment is late. In many cases, these are start-up businesses.
We’ve summarised the key rules for you. Our advice: don’t leave filing your VAT return until the last minute, and make your payment a few days before the deadline. Late filing and/or payment will inevitably result in fines! The laws and regulations in this area leave little room for leniency.
Tax return periods
For the purposes of VAT, the Tax and Customs Administration applies three possible time periods:
- calendar month;
- calendar quarter;
- calendar year.
The general rule is that VAT returns are submitted on a quarterly basis. This quarterly returns must be submitted in the month following the end of the quarter. The VAT due must also be paid in that month.
- First quarter (January, February, March): submit your tax return and pay by April;
- Second quarter (April, May, June): submit your tax return and pay by July;
- third quarter (July, August, September); submit your tax return and pay by October;
- Submit your tax return and make your payment for the fourth quarter (October, November, December) by January.
If a business owner fails to meet their VAT obligations, or fails to do so on time, on multiple occasions, the Tax and Customs Administration may change the tax return period to monthly returns. The business owner may also request to be allowed to submit VAT returns on a monthly basis. This is particularly useful when VAT is to be reclaimed.
Monthly returns must be submitted in the calendar month following the month to which the return relates. And, of course, the VAT due must also be paid in that month. The monthly return for April must be submitted in May, and the VAT must then be paid in May.
When do you file your tax return on time?
You must submit your VAT return electronically. Using your own username and password, you can access your returns via the (return) portal on the website by the Tax and Customs Administration. Your tax return is then submitted as soon as you have clicked the “submit” button after completing it. Your tax return is considered to have been submitted on time if it is received by the Tax and Customs Administration by 23:59 on the last day of the month at the latest.
You will usually receive a confirmation by email. The submitted return will then be listed, along with the date and time, in the list of submitted returns. You can generate a PDF file of your return, showing the date and time of submission, but you can only do this before you finalise the return.
New entrepreneurs usually receive a starter VAT return. This VAT return cannot be submitted electronically. You must therefore complete the paper return form and return it to the Tax and Customs Administration. You must do this before the submission deadline stated on the paper return form. To pay the VAT due on a starter return, you must wait for the (additional) assessment notice.
When do you pay on time?
If your VAT return results in an amount due, you must take the necessary steps yourself to pay this amount on time. VAT is a self-assessed tax. The tax authorities do not issue a tax assessment.
The date on which your payment is credited to the Tax and Customs Administration’s bank account is decisive for determining whether your payment is on time. If you pay on the last day of the month and your payment is not credited to the Tax and Customs Administration’s bank account until the following day, your payment is late. When paying VAT, you should therefore take into account the time banks need to process your payment.
It is important that you make your VAT payment in strict accordance with the instructions provided by the Tax and Customs Administration. Naturally, you must pay into the correct account number. However, you must also use the correct payment reference. This is because the Tax and Customs Administration processes payments fully automatically. If your payment is not linked to your tax return, the Tax and Customs Administration’s system will assume that you have not paid and will automatically impose a penalty.
A small mistake
You can only submit your VAT return once. Once you have clicked the “Submit” button, the return is final. If you subsequently realise there is a mistake in the return, you cannot resubmit it. You will then need to correct the error by submitting an amended return. If the return shows an excessively high amount of VAT payable, it is advisable to pay this higher amount. You will then be refunded the overpayment following the submission of the amended return.