Domestic VAT refund: often overlooked
The corona pandemic has drastically reduced business travel. Due to the many restrictions, companies incurred almost no expenses abroad last year. But costs were incurred in the Netherlands. Large numbers worked from home. Mileage and hotel stays have made way for office chairs, internet and coffee. As with foreign VAT, entrepreneurs often miss opportunities here.
The government has taken measures to accommodate employers and employees in times of crisis. For example, the free allowance in the work-related costs scheme was increased on a one-off basis and more flexible rules regarding the fixed travel allowance apply until 1 October 2021. And although some of these measures will only be in place temporarily, it is expected that also after the coronary crisis, working from home will remain the norm or at least become much more common.
This working from home brings with it the necessary costs, which are often claimed as expenses by the employee. There are probably few foreign expenses for 2020, but have you reclaimed all domestic VAT? This is often overlooked. For example, if the expenses are incurred by HR rather than the finance department.
When is VAT deductible?
Specific rules apply for reclaiming VAT in the Netherlands. The deduction of input tax is, of course, not permitted in all cases. For example, you may not deduct VAT on:
- Private expenditure;
- Expenditure on your exempt turnover (that is, turnover for which you do not charge VAT to your customer)
- Expenditure on food and drink in a catering establishment;
- Employee benefits, gifts and business gifts of more than €227 (excluding VAT) per person per year.
VAT that can be reclaimed
The VAT on business expenses is deductible. As an entrepreneur, you must be able to present a correct receipt or invoice. No receipt or invoice? Then you may not deduct input tax. Examples of VAT that may be reclaimed but are often forgotten are:
- Office equipment (desk (chair), printer etc.);
- VAT charges for the mobile phone
- Business courses that are not exempt.
Business expenses can also be costs that the employee incurs to be able to carry out his or her work at home in a safe, healthy and efficient manner. In some cases, of course, it will be necessary to check whether the costs are actually business expenses, but it can certainly be worthwhile to go through the employee expenses for the past year to see whether any VAT can still be reclaimed.
The Tax and Customs Administration allows you to correct a mistake, so be sure to do so! You can process small amounts (up to €1,000) in the next VAT return. For amounts over €1,000, you must submit a supplementary declaration. This is possible up to 5 years after the error.
This domestic VAT refund is also easy and efficient to arrange with VAT4U's software. Thanks to the smart integrations with ERP and T&E software, the necessary data can be imported automatically. This way, you as an entrepreneur do not have to worry about it.
Moreover, thanks to optical character recognition (OCR) technology, digitising the receipts has never been easier. Invoices that do not meet the requirements are automatically detected. This means that fewer claims remain unresolved and the percentage of successful returns is much higher. In difficult coronation times, this is no superfluous luxury.