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VAT filing second quarter of 2014

This is the month of July, the month after the second quarter and in this month the second quarter value added tax (VAT) return needs to be filed and paid. This is of course a message for Dutch VAT entrepreneurs that have a quarterly filing obligation. We cannot stress too much how important it is for your relation with the Dutch tax office to meet the deadlines set by the tax office.

VAT is a tax you as entrepreneur basically collect for the Dutch tax office. For the Dutch tax office it is very important that you do pay this collected tax to them and in time. It is a rather rigid part of the Dutch tax system. Where we encounter that the tax office will call you when you forgot to file the wage tax return, this is not happening with the VAT.

When filed too late or not at all, an ex officio assessment is send by the tax office for an amount that will make you respond. Sometimes that is EUR 1000, sometimes that is EUR 50.000. Some entrepreneurs pay these ex officio assessment under the assumption that they are obliged to. Actually they are obliged to pay these assessments, but these ex officio assessments are meant to trigger the entrepreneur to update their bookkeeping and file a correct VAT return and appeal at the same time the ex officio assessment.

When not filed in a number of occasions, then the tax office will switch the quarterly VAT return to a monthly VAT return. You might think there is not much difference here. You did not file the quarterly, so you simply do not file the monthly. But the trick is in the ex officio assessments and the penalties. On a monthly basis these soon go through the roof and will cause your company and you personally to go bankrupt if no action is taken.

A side effect is that you are being known with the tax office and that nearly always results in an audit. An audit always results in adjustments, can be small adjustments, can be huge adjustments. Then you not only have a VAT issue with the tax office, but you can also have a wage tax, social premium and income tax issue with the tax office. All caused by not filing the VAT return in time.

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