During the financial year in the Netherlands – which is the same as the calendar year – the company has its overheads, generates income and has outstanding creditors, debtors and bank balances. To keep track of these annual accounts, an annual report is made.
This annual report shows the commercial valuation of the debtors, creditors, loans and other assets and liabilities on the balance. The profit and loss overview shows the turnover and the costs incurred for that financial year.
Income tax return
For the income tax return we are of the opinion you do not need to have a separate annual report if your company is a so-called ‘one man company’ (ZZP company). The personal income tax return already requires you to provide a fiscal balance and a fiscal profit and loss overview which is part of your taxable income.
That’s why our fee for an entrepreneur’s tax return is EUR 550 excl. VAT, instead of EUR 370 incl. VAT for a non-entrepreneur’s income tax return. No annual report is provided separately over and above the one already included in the income tax return.
Vennootschap onder Firma
If your company is really just two one-man companies combined, then what you have is a joint venture, referred to fiscally as a VOF. Vennootschap onder Firma (‘Official Partnership, Joint Venture’). The VOF does require an annual report as in that report the entrepreneurs can mutually allocate who is entitled to what part of the profit, and who is entitled to what part of the equity of the company.
These rights are defined in the VOF contract that is required for a VOF company to operate.
Our fee for creating the annual report is EUR 400 excl. VAT per year.
Besides the VOF costs, the individual participants can have costs outside of the VOF that are not included in the VOF accounts. Like telephone costs they pay themselves, or bank charges incurred on a private bank account for non-VOF items.
We can include these costs, which fall outside the scope of the VOF, on the personal income tax return as well, and we maintain that no annual report is required other than the VOF one.
The BV company is a formal type defined in law. Amongst other things, an annual report must be compiled. We can create such a report for EUR 400 excl. VAT per year. The report can only be submitted to the Chambers of Commerce once the official approval of the report by the shareholders is officially recorded in the minutes of their meeting.
The annual accounts must be submitted to the Chambers of Commerce. Failure to do so is a fiscal offence carrying a EUR 900 penalty. Moreover, in the case of bankruptcy the fact that the annual report was not submitted in any one year will be viewed by the curator as an act of bad faith.
The corporate income tax return of the BV company is based on the commercial values set out in the annual report. We can file the corporate income tax return for EUR 550 excl. VAT per BV company per year. The annual report is the basis for the corporate income tax return. In this corporate income tax return commercial values can be translated into fiscal values.
A commercial fiscal difference in valuation can result due to the reporting rules. For instance, if the BV company holds more than 5% shares in another BV company, this is regarded as participation. A participation is fiscally reported for the purchase price. However, over the course of years the result of this participation makes the commercial value of the participation differ from the fiscal valuation, and this commercial fiscal difference is reported in the corporate income tax return.
Another difference in commercial and fiscal valuation can be in the difference in the amortisation of investments, the difference between commercial value of debtors and the actual fiscal value of debtors, etc.