Invoicing and VAT
When you sell something to one of your clients, normally you will send an invoice. The Dutch government has set some demands on the way an invoice should look like. On an invoice, at least the following should be stated:
- Your name and address
- The name and address of your client
- The date when the product or service was delivered
- The date of the invoice
- A clear description of the product you have delivered or the service you have performed
- The total amount due
- The VAT-percentage (21%, 6%, or BTW verlegd)
- The VAT-amount
When the VAT is “verlegd”, you have to write down the VAT-number of your client. The VAT should be based on all expenses for which you will be compensated, including costs as travel expenses and material costs.
When you deliver services or goods to another entrepreneur abroad, within the European Union, it may be possible that the other party pays the VAT. This is called BTW verlegd. In order to do this, you will need to write down BTW verlegd or VAT transferred to client or 'reversed charge method' on your invoice and the invoice should contain the VAT number of the foreign entrepreneur.
For further questions on this topic, please contact us.
Invoicing or expense reimbursement If you want to get expenses reimbursed by your client, there are two options for doing that.
You can send an
- expense sheet or
- you can send an invoice.
1. An expense sheet is an overview of the costs including the original receipts. These receipts go to your client’s administration.
2. You can also send an invoice including VAT. The client is able to deduct the VAT, so for him it makes no difference in costs whether you send an invoice or an expense sheet. If you send an invoice, the receipts are included in your own administration. You need to follow option 2 if you have a VAT number and work as an entrepreneur. Option 1 is applicable if you work for an employer and not as an entrepreneur.
One of the administrative obligations you have as an entrepreneur is to set up a proper invoice. The legislature has set up a few demands on the contents of a bill. The invoice must be clearly and include:
- The date that the supplies or activities are delivered;
- The date of issue of the invoice;
- The date of any prepayment;
- The invoices must be numbered consecutively
- Your own name and address;
- Name and address of the client;
- A clear description of the activities or goods;
- The fee;
- The correct VAT rate;
- The VAT amount that the clients has to pay. Specifying a different amount than the VAT tax is not allowed.
- The VAT-number of the client in case the VAT is transferred to the client and;
- If applicable put on invoice: ‘VAT transferred to client’ or 'reversed charge method'.
Extra charges like travel expenses should be included in the tax calculation An invoice must be made within 15 days after the end of month in which the work was done. If you fail to properly set up an invoice, it may result in loosing the right to deduct or reclaim VAT.
Sending Invoices with transferred VAT
If you supply goods or activities to business clients in other EU Member States, you’re sometimes allowed to transfer the VAT to the client. This is possible under strict conditions. The most important thing is that the transfer is reported on the invoice (BTW verlegd naar afnemer) and the VAT number of the client must me on the invoice.
Also, if you receive an invoice you need to make sure it meets the requirements. If your contractor is self employed and a ‘small’ office, you need to ask for a VAR statement and copy passport. You don’t have to ask for it, but its making life easier for you.