If it transpires that you have underpaid VAT, you must submit a supplementary return. And you must do this entirely on your own initiative, as soon as you realise that you have underpaid VAT. The law imposes a duty on business owners to report this voluntarily. This duty also applies, incidentally, if you have paid too much VAT.
Supplementary tax return
We have already described the obligation to amend (supplement) submitted VAT returns in our article Supplementary VAT return by 1 April. Although you must make an adjustment as soon as you realise that you have paid too little or too much VAT, it is important to do so in any event by 1 April of the year following the year to which the adjustment relates.
At present, you can still submit your VAT supplementary return on paper. To do so, you must use the form provided by the Tax and Customs Administration.
As the Tax and Customs Administration recently announced on its website, with effect from 1 January 2018, supplementary VAT returns can only be submitted digitally. This can be done by logging in as a business on the Tax and Customs Administration’s website or using your own software.
If the VAT to be corrected amounts to €1,000 or less, the correction may also be included in the next regular VAT return.
Fine
The fact that great importance is attached to the voluntary obligation to correct VAT payments is evident from a ruling of the Gelderland District Court. Naturally, the court confirms that the business owner is obliged to provide the Tax and Customs Administration with the correct information via an amended tax return. However, the business owner must also ensure that the amended tax return actually reaches the Tax and Customs Administration.
The court has ruled that it is not sufficient for the business owner to demonstrate that the supplementary tax return has been sent to the Tax and Customs Administration. The business owner is required to satisfy themselves in some way that the supplementary tax return has been received by the tax authorities. This can be done, for example, by sending it by registered post, but also by checking with the tax authorities after dispatch to confirm that the return has been received.
The court upholds the fine, which was imposed for failure to comply with the obligation to provide information voluntarily. The fine amounts to 25% of the additional VAT assessed.