What is a VAT invoice you might wonder if you purchase as company owner something in a shop.
What is a VAT invoice
In the old days and maybe even now, you are sometimes asked if you would like to have a Value Added Tax invoice while you are in the shop. If you say yes, a more elaborate invoice is printed. Is that a VAT invoice? No it still is not a VAT invoice.
A VAT invoice is an invoice that meet the requirements set in article 35a of the VAT act of 1968. Since 1968 not a lot has changed in the invoice content, so the invoice needs to contain the invoice number and the correct amount of VAT. More importantly, for the invoice to be an accepted business costs, the name of the business needs to be mentioned on the invoice
Business name on the invoice
The shop that printed the VAT invoice only could have done a good job, if your business name was on the invoice. As that is never the case in a shop, the VAT invoice was still not a Value Added Tax invoice.
Since 1968 a lot has changed in the world and now you shop online. Or you become member of Sligro, Makro, Office Centre. Those companies demand your Chamber of Commerce number, and you think for advertisement spamming. Indeed, but also for providing you with a correct Value Added Tax invoice. As the chamber of commerce details are on the invoice, the invoice is correct.
What is your business name?
Silly question, what is your business name. It is the name of my business as registered with the Chamber of Commerce. What happens if on the invoice is stated your personal name, not the business name. Is that a problem?
Depends, is the universal reply. Indeed it depends on the type of business you run. If that is an one man company or ZZP company or freelance company, you and the company are one. Hence whether your name is on the invoice or the business name is on the invoice, makes little difference. Still business name is preferred.
The moment you own the shares in a limited company, like a BV company, the rules are different. If you pay an invoice that is created in your personal name that are in fact business costs there is a problem. The BV business cannot deduct these costs. There are some limited employee exceptions, but in general you need to go back and ask an invoice in the name of the BV company. During an audit, this is an issue.
Finally the correct amount of VAT
The invoice needs to contain the correct amount of Value Added Tax. That is often the 21% VAT rate. If you invoice clients outside the Netherlands inside the EU, the invoice requires more content. Among which the VAT number of the client. If you invoice for services outside NL and outside the EU, the VAT is again different.
But if you invoice non business clients out the Netherlands inside the EU and that turnover exceeds EUR 10.000 for all business outside NL, you need to charge the local VAT rate. The correct local VAT rate. Some countries in the EU have a festival of VAT percentages.
Tax is exciting
We think tax is exciting. You might think that VAT is not that complex, but please think again. There are rules and in the above article we touched something simple as the name on the invoice.