10 tips for the best VAT return

March 20, 2023

10 tips for the best VAT return!

Soon, the first quarter will end and most entrepreneurs will have to file their VAT return again. In this article, we'll give you the 10 best tips for the best VAT return!

1.  File your return on time and pay on time if you owe tax.     

It's important to file your return on time to avoid a penalty and additional assessment. If you fail to file your return or file it too late, the tax authority will impose an additional assessment. This is an estimate of the tax you should pay. The tax authority always makes a generous estimate, so you may temporarily have to pay more, which can be inconvenient. You can be fined €68 if you're 7 calendar days late in filing your return. Nobody wants that, of course.

2. Only include sales and costs for the period covered by the return.   

You should look at the invoice date, not the payment date. For example, if you're working on the VAT return for the first quarter in mid-April, you shouldn't include costs from April in this return.

3. Always check your previous return.                                     

It's always helpful to have your previous return on hand. This way, you can make corrections for the previous quarter if necessary.

4. Don't include costs in the return if you've lost the receipt/invoice.   

It's unfortunate if you've lost a receipt, but you shouldn't include those costs in the VAT return. Without proof, you can't include costs, and you want to avoid problems with the tax authority.

5. Pay attention to uncollectible invoices.                                     

If you're sure you're not going to receive money from a particular customer, it's better not to include this sales invoice in the VAT return. Otherwise, you'll pay VAT on sales when you haven't actually made any sales and are not sure you will receive the money.

6. Don't forget to include start-up costs.                               

Many entrepreneurs forget to include the costs they incurred before starting their business. This is a shame because you can include these costs in your return.

7. Always check if you've included all periodic costs.                 

You often have some costs that occur every month, such as rent, telephone/internet costs, and other automation costs. You can easily check whether you've included the invoice for each month in your VAT return for these costs. Simply check if the amount of invoices complies with the amount of invoices you should have.

8. Plan your expenses at a smart time.                               

Ideally, you want to make large investments at the end of a quarter (when filing quarterly VAT returns). With purchases, you always pay the VAT to the supplier first, and then you can claim back this VAT at the end of the quarter when filing the VAT return. If you make investments at the end of the quarter, you have to wait the shortest amount of time for the VAT to be redeposited. For example, if you buy a laptop for 1000 euros on January 1st, you have to wait even longer for the same VAT!

9. Be careful with invoices in foreign currencies.                       

For VAT returns, foreign currency must always be converted into euros. You must convert this currency using the exchange rate on the day of the invoice date. It is not intended that you convert everything using the exchange rate on the day you are working on the VAT return.

10. Request an extension for your VAT return if you really can't do it otherwise.                                                                       

Only in exceptional situations can you request an extension for your VAT return. The tax authorities themselves give the example that if your computers, for example, no longer work due to a fire, you can request an extension for the VAT return.

Hopefully these 10 tips will help with filing your VAT return. If you want to know more about VAT returns, we have an article for you with everything you need to know about VAT returns.