No fewer than 64,000 business owners were late in submitting their VAT returns for the first quarter of 2019, according to ZZP Netherlands. It appears that this mainly concerns self-employed people who are just starting out and are not yet used to the requirement to file periodic tax returns.
Quarterly returns
The VAT return period is the quarter (quarterly returns). The return must be submitted in the calendar month following the quarter. Furthermore, the tax authorities must have received payment of the VAT amount due on the return into their bank account during that month.
We also refer to these months as the VAT months:
| Period | Submitting a VAT return (and paying VAT) in the (VAT) month |
| 1st quarter (January/February/March) | April |
| 2nd quarter (April/May/June) | July |
| 3rd quarter (July/August/September) | October |
| 4th quarter (October/November/December) | January (of the following calendar year) |
Make a note of these VAT months in your diary, so that you remember to submit your VAT return and pay the VAT amount on time. You can also use the app for this VAT alert use.
It is possible to apply for an extension to the deadline for submitting your VAT return, but in practice such applications are almost never granted. This is only worthwhile in the event of very exceptional and very serious emergencies.
Different tax return period
VAT-registered businesses can also submit their VAT returns on a calendar-month basis (monthly return). The return must then be submitted in the calendar month following the return month. VAT-registered businesses submit monthly returns:
- who have asked the Tax and Customs Administration for monthly returns (usually because they are entitled to VAT refunds);
- those on whom the Tax and Customs Administration has imposed an obligation to submit VAT returns on a monthly basis (because, on several occasions in the past, VAT returns were not submitted on time and/or VAT was not paid on time).
Business owners who owe less than €1,883 in VAT per year can ask the Tax and Customs Administration to annual tax return to be eligible for VAT. This option will be abolished with effect from 1 January 2020 in connection with the introduction of the new KOR.
Additional tax assessment with a penalty
What happens if you fail to submit your VAT return? In that case, the Tax and Customs Administration’s computer system will automatically issue you with a supplementary VAT assessment for the relevant return period. You will receive this supplementary assessment by post. The VAT amount will be estimated and two penalties will be imposed:
- a late filing penalty for failing to submit the VAT return (on time): € 65;
- a late payment penalty for failing to pay the VAT due (on time): 3% of the VAT amount (at least € 50 / up to €5,278).
If the VAT amount estimated by the Tax and Customs Administration is too high, you can, of course, lodge an objection to the additional assessment. However, neither the imposition of an additional assessment nor the lodging of an objection relieves you of the obligation to submit your VAT return. Following your objection, the tax authorities will therefore require you to submit the VAT return for the relevant period after all. If the return shows that no VAT is due, the penalty for failure to pay (on time) will usually be waived.
If the Tax and Customs Administration has underestimated the VAT amount, the difference may be levied as an additional assessment as soon as this comes to light. Instead of a default penalty, an administrative penalty may then be imposed. This amounts to 25% of the additional VAT assessed.
REMEMBER
Even if you do not owe any VAT, you must submit the VAT return issued to you. VAT returns are issued by making them available to you on the business portal at the website of the Inland Revenue.