VAT issues for foreign businesses with a Dutch branch

If you have overpaid or underpaid VAT in a certain period, you have the obligation of adjusting the tax return for that period. Adjustments are permitted within five years of expiry of the period in question.

You can adjust a tax return for a certain period as soon as you find out that an error was made in the return. The procedure for making adjustments depends on the amount of overpaid or underpaid VAT.

• If this amount is higher than € 1,000, you can use a supplementary tax form to make an adjustment for the entire fiscal year as soon as that year has ended.
• If the amount is lower than € 1,000, the adjustment must be included in the next tax return. You will then not receive an additional tax assessment or a refund decision.

If you are entitled to a VAT refund of more than € 5,000 or owe more than
€ 5,000 in VAT, you will have to submit a supplementary tax form. Based on the supplementary tax form, the Dutch Tax & Customs Administration will send you a refund decision for the refundable VAT or an additional tax assessment for the amount of tax due respectively. If you receive an additional tax assessment, you are expected to pay the VAT you failed to pay before. In addition to the additional tax assessment, the tax authorities will also impose a default penalty equalling 5% of the VAT payable.

If you submit a supplementary tax form later than three months after the end of the year in which you underpaid VAT, interest on tax due will be levied. If you underpaid VAT and you did not submit a supplementary tax form, you may be fined with a financial penalty for not adjusting your tax return. Please remember to submit the supplementary tax form within three months of the end of the fiscal year.

Please contact your accon■avm adviser or send an email to international@acconavm.nl if you want to find out more about submitting a supplementary tax form.