Why hire a local Dutch bookkeeper for preparing annual accounts and tax filing?
Let’s say you’re a non-Dutch resident running a Dutch company. You decide to do your own bookkeeping, prepare the annual account, and perhaps file valued added tax filing.
Seems like a reasonable idea, right?
You soon would realize that you have no idea about the intricacies of the Dutch accounting and tax return filing system. You have no idea about the local legal and regulatory framework, and you are not familiar with the nuances of local accounting practices.
Now you’re stuck and struggling to keep up with the Dutch company’s filing requirements. Not only will you be facing penalties for non-compliance, but you’ll also be losing precious time and resources trying to sort out the mess.
Hire a local Dutch bookkeeper not only will they have the knowledge and experience in accounting services needed to handle your compliance required for a Dutch company with ease.
Importance of financial statement and Tax return Filing
As a director of a Dutch company, it is your legal responsibility to ensure that annual accounts and tax return filings are completed accurately and on time.
Failing to do so can lead to fines and high costs to get it right again.
Therefore, it’s crucial to prioritize the timely preparation and submission of these financial statements and tax and customs administration.
Requirement of filing financial statements of a Dutch B.V. company
The board of directors of a Dutch private limited company (besloten vennootschap or BV) has duties to prepare their annual financial statement within five months after the end of the financial year.
The financial statements will then be presented to the shareholder to adopt. If necessary, shareholders can grant for an extension of another 5 months, allowing them to prepare their accounts within ten months after the end of the financial year.
Once the accounts have been prepared, the shareholders have 2 months to adopt the accounts by convening the annual general meeting. If you are not familiar with the specific formalities for convening, holding, and conducting an Annual general meeting required under dutch law, this post on the roles of company secretary in Netherlands may give you some insight.
Once the annual account is adopted, it has to be filed at the dutch chamber of Commerce KVK no later than 8 days.
Not adopted the annual account within the deadline
If the shareholders have not adopted them within the deadline, you must still file the unadopted accounts within 7 months if no extensions are granted.
If you have 5 months extension granted by the shareholders, then the unadopted account has to be filed within 12 months after the end of the financial year.
Tax filing in the Netherlands
Tax returns
Corporate income tax (CIT) is a tax that is levied on the profits of Dutch companies. If your company or legal entity is registered in the Netherlands, you will need to file a CIT return each year with the Dutch tax and customs administration, the Belastingdienst.
The CIT return includes information about your company’s income, expenses, and deductions for financial transactions during the previous calendar year. You’ll also need to provide details about any losses or profits that have been carried forward from previous years.
The deadline for filing your CIT return is typically June 1st of the year following the financial tax year. For example, if your tax year runs from January 1st to December 31st, you’ll need to file your CIT return by June 1st of the following year. It’s essential to file your CIT return on time to avoid penalties and interest charges.
To file your CIT return yourself, you’ll need to use the electronic tax portal of the Dutch tax authority. The portal is known as MijnBelastingdienst Zakelijk, and it’s available in Dutch and English. You’ll need to create an account on the portal and then follow the steps to file your CIT return.
If you’re filing your CIT return for the first time, or if you’re unfamiliar with tax law in the Netherlands, it’s a good idea to consult with a tax consultant or a local Dutch accountant or bookkeeper. An experienced professional can help ensure that your CIT return is accurate and complete.
Payroll tax administration
If your dutch company employs local staff, you’ll need to file payroll tax returns on a monthly basis.
Payroll tax is a tax that is levied on the wages and salaries paid by Dutch and international companies, to their employees.
Wage tax is the primary component of payroll tax and is levied on all salaries and wages paid to employees. The tax rate varies depending on the amount of the salary.
Dutch National Insurance
National insurance contributions are also part of payroll tax and are used to fund the Dutch social security system.
Both employers and employees are required to contribute to national insurance, and the rate varies depending on the type of insurance and the income level.
If you have employees in the Netherlands, you’ll need to register with the Dutch tax authority, the Belastingdienst, and obtain a payroll tax number. You’ll also need to withhold and remit payroll taxes on a regular basis, typically on a monthly or quarterly basis.
Wage tax tables
You’ll need to use the wage tax tables the Dutch tax authority provided to calculate payroll taxes.
These tables provide the tax rates and deductions for different salary levels, and you’ll need to use them to calculate the amount of payroll tax that needs to be withheld from each employee’s salary.
It’s also important to keep accurate records of all payroll tax transactions, including the salaries paid to employees, the tax withheld, and any deductions or credits that apply.
This information will be used to prepare your annual tax return and ensure that you comply with all Dutch tax regulations.
Dutch labor laws
In addition to payroll taxes, there are other considerations to keep in mind when it comes to paying employees in the Netherlands.
For example, you’ll need to comply with Dutch labor laws, which govern issues such as minimum wage, working hours, and employee benefits. You may also need to register with a Dutch pension fund if you have employees who are eligible for a pension.
Overall, payroll tax can be a complex and time-consuming process, particularly for companies with multiple employees or those with international clients who are unfamiliar with the Dutch tax system.
However, by working with a local Dutch bookkeeper or tax advisor, you can ensure that your payroll tax obligations are met in a timely and accurate manner, allowing you to focus on growing your business.
Value Added Tax and customs administration
VAT is a tax that is levied on the sale of goods and services by foreign businesses in the Netherlands. The tax is added to the price of the goods or services and is collected by businesses on behalf of the Dutch tax authority, the Belastingdienst.
In the Netherlands, the standard VAT rate is currently 21%, although there are also reduced rates of 9% and 0% for certain goods and services. For example, food and books are subject to the reduced rate of 9%, while some goods, such as medical equipment and certain agricultural products, are subject to the 0% rate.
If you sell goods or services in the Netherlands, you’ll typically need to register for VAT with the Belastingdienst. Once registered, you’ll be assigned a VAT number and must charge VAT on all sales subject to the tax.
Valued Added Tax refunds
You’ll also reclaim any VAT you’ve paid on business expenses, such as office supplies or equipment.
VAT returns are typically filed on a quarterly basis in the Netherlands, although monthly or annual filing may also be required depending on the size of your business.
When filing a VAT return, you’ll need to report the total amount of VAT charged on sales and the total amount of VAT paid on business expenses.
You’ll then need to also pay tax on the difference between these two amounts to the Belastingdienst by submitting a VAT return.
In addition to these basic requirements, a number of specific rules and regulations apply to VAT in the Netherlands.
For example, if you sell goods or services to customers in other EU countries, you may be eligible for certain exemptions or deductions under the EU’s VAT rules. Similarly, if you import goods from outside the EU, you may need to pay import VAT and other duties.
Apply for dutch VAT number after company formation
Are you struggling with obtaining a Dutch VAT number?
Don’t worry, you’re not alone. The process used to be straightforward, but now it involves an 8-page questionnaire from the Dutch tax authority that can be daunting to fill out on your own.
We can assist you in translating the questionnaire from Dutch to English and help you complete it accurately and efficiently.
Once we’ve filled out the form, we’ll submit it to the tax authority by registered post within the required timeframe.
We understand that time is of the essence in business, and delays in obtaining a VAT number can cause unnecessary stress and setbacks.
Let us take the burden off your shoulders and help you obtain your VAT number quickly and seamlessly.
If you need help applying for a VAT number for your Dutch business, you may find this dealing with incoming correspondence and filling in the VAT questionnaire combined package useful.
Once you are registered for VAT, you will need to submit your VAT return quarterly.
If you are subject to a VAT refund, we can arrange for the tax refund to be transferred directly to your Dutch business bank account.
Local dutch bookkeeper to communicate with tax authority
One of the key advantages of hiring a local Dutch bookkeeper is their ability to communicate effectively with the local tax authority.
In case of issues related to the late VAT return filing, late fines or tax refunds, for example, a local bookkeeper can speak directly with the tax authority and work to resolve any problems promptly.
In contrast, if you were to handle these issues on your own, you may face challenges in communicating with the tax authority effectively, potentially resulting in delays or errors in resolving the issue.
Contact us if you are interested in learning more about our bookkeeping services and pricing.
FAQ
What is the corporate income tax rate in the Netherlands in 2022?
The corporate income tax rate depends on the taxable amount. The taxable amount is the taxable profit in a year reduced by deductible losses.
- If the taxable amount is € 395,000 or less, the corporate income tax rate is 15%.
- If the taxable amount is more than € 395,000, the corporate income tax rate is € 59,250 plus 25,8% for the taxable amount exceeding € 395,000.
What is payroll tax in the Netherlands?
Payroll tax is a tax that is paid by employers on the wages they pay to their employees. It includes social security contributions, health insurance premiums, and other taxes and contributions.
What is VAT in the Netherlands?
VAT is a tax that is levied on the sale of goods and services in the Netherlands. The standard rate is 21%, with reduced rates of 9% and 0% for certain goods and services. VAT returns are typically filed on a quarterly basis.
Can you claim VAT back from Netherlands?
To claim a VAT refund, your Dutch company has already granted a Dutch VAT number.
You will need to prepare and submit a VAT return to the Dutch tax authorities along with supporting documentation such as invoices.
When do I need to file Corporate income tax in the Netherlands?
The deadlines for filing corporate income tax returns are due by June 1 of the year following the tax year.
How much do it cost for annual accounting and tax filing services for a dutch company?
Determining the exact cost of annual accounting services for a Dutch company can vary depending on the number of transactions and activities performed each month. However, we understand the importance of budgeting and transparency when it comes to financial matters.
That’s why we offer fixed annual fees for companies with a consistent range of monthly transactions. This allows you to have peace of mind knowing that your budget won’t be unexpectedly exceeded and that you can confidently plan for the cost of our services.