VAT on submitted documents

Modified on Mon, 1 Jun at 12:23 PM

This article aims to describe how Yuki handles (should handle) VAT on submitted documents and what settings and environmental factors play a role in this.

Is the company subject to VAT?

The first question that arises in this context is whether the company is subject to VAT or not. This is recorded per administration in the company profile. If 'not subject to VAT' is selected there, all documents will be posted without VAT. The amount to be paid is then booked as net revenue or costs.

If the company is subject to VAT, we need to distinguish between VAT on sales invoices and VAT on purchase invoices.

Sales invoices

Sales invoices must be broken down by VAT type so that the basis in the VAT return corresponds to the chosen VAT amount and the chosen VAT type. In other words, at the line level, the following must apply: BASE amount x VAT percentage = VAT amount.

Here's an example: If the base of an invoice line is 1,000.00 euros and the 21% VAT type is selected, then the VAT amount must be 210.00 euros.

VAT types

The following VAT types are possible:

VAT high (21%)
VAT low (9%)
VAT low (6%) (from 01-01-2019)
VAT other
VAT Export within the EU (0%) (for invoices before 2010)
VAT Export services within the EU (0%) (for invoices from 2010)
VAT Export of goods within the EU (0%) (for invoices from 2010 onwards)
VAT Installation and distance selling within EU
VAT Export outside EU (0%)
VAT Reverse-charge (0%)
VAT Exempt (0%)
VAT 0% (0%).

When can/must which VAT type be used?

VAT high 21%
This type can only be used if the VAT amount is 21% of the base, in other words, if it concerns goods or services for which the invoice states that they are taxed at 21%.
VAT low 9%
This type can only be used if the VAT amount is 9% of the base, in other words, if it concerns goods or services for which the invoice states that they were taxed at 9%.
VAT low 6% (from 01-01-2019)
This type can only be used if the invoice relates to the supply of goods and services before 01-01-2019..
VAT other
The use of this type is rare or never occurs. This type can only be used if the invoice includes goods or services for which it is clearly stated that a different VAT rate applies than 21%, 9%, or 0%. This percentage may not be used to post an invoice that includes a combination of goods/services with 21%, 9%, or 0%.
VAT Export within the EU (0%)
This type was applicable until 12/31/2009. After that date, such exports must be broken down into "services" and "goods." This is because a separation that needs to be made to the ICL declaration (Intra-Community Supplies).
This type is used by Yuki when there is no VAT on the invoice and the customer's country (debtor) is an EU country outside of the Netherlands.
VAT Export services within the EU (0%)
This type has been applicable since January 1, 2010. The breakdown between services and goods is important for the ICL declaration (Intra-Community Supplies).
This type is used by Yuki when the invoice doesn't include VAT, it's clearly a service, and the customer's country is an EU country outside of the Netherlands.
VAT Export of goods within the EU (0%)
This type has been applicable since January 1, 2010. The breakdown between services and goods is important for the ICL (Intra-Community Deliveries) declaration.
This type is used by Yuki when the invoice doesn't include VAT, it's clear that it concerns goods, and the customer's country is an EU country outside of the Netherlands.
VAT Installation and distance selling within EU
This type is formally intended for deliveries to customers within the EU. Contrary to the previous types within the EU, a 0% rate can no longer be used because the goods are transported abroad at the supplier's expense and the recipient abroad is not subject to VAT. In this case, the supplier must file a declaration abroad themselves and pay the VAT there. You can recognize this type by the fact that VAT is included on the invoice (e.g., 21% for Belgium), but the recipient is located abroad. It becomes difficult when, for example, the delivery is made to someone in Germany (with 19% German VAT).
VAT Export outside EU (0%)
This type is used by Yuki when there is no VAT on the invoice and the customer's (debtor's) country is outside the EU.
VAT Reverse-charge (0%)
This type is widely used in the construction industry. The selling party does not have to pay the VAT themselves but shifts the payment obligation to the buyer. The invoice does not mention VAT (the VAT amount is 0.00). However, the invoice often includes a note "VAT reversed". This applies to the entire invoice.

When maintaining the VAT rates, a VAT type must be created with a VAT of 9% or 21% (for a detailed description, see article Set VAT rate).
VAT Exempt (0%)
Various services and products are exempt from VAT. Examples include: insurance, medical treatments, childcare, etc. See also the website of the tax authorities. The entrepreneur of services or products that are exempt is also not entitled to deduct input tax. Therefore, the turnover that is exempt from VAT does not need to be included in a return. This is in contrast to products for which the zero rate applies (see VAT 0%).
This VAT type can be recognized by the fact that there is no VAT on the invoice. Often, the invoice will state "exempt from VAT" or something similar somewhere. However, many entrepreneurs don't clearly state this on their invoice. You then need to check if the services/goods provided are exempt.
VAT 0%
A limited number of goods and services are subject to a so-called zero rate. This is almost non-existent on the sales side. An example is tobacco. So usually, if there's no VAT on the sales invoice, it's either export abroad or a VAT exemption. In the latter case, however, the entrepreneur is also not allowed to reclaim VAT. The VAT setting in the administration must then actually be set to 'Not liable to VAT'.

Purchase invoices

VAT types

The following VAT types are possible:

VAT high (21%)
VAT low (9%)
VAT low (6%) (from 01-01-2019)
VAT Input tax
Acquisitions within the EU (0%)
Import outside the EU (0%)
VAT Reverse-charge (0%)
VAT 0% (0%)
VAT Non-deductible.

When can/must which VAT type be used?

VAT high 21%
This type can only be used if the invoice contains 21% VAT in its entirety, in other words, if it concerns goods or services for which the invoice states that they are taxed at 21%.
VAT low 9%
This type can only be used if the invoice contains 9% VAT in its entirety, in other words, if it concerns goods or services for which the invoice states that they have been taxed at 9%.
VAT low 6% (from 01-01-2019)
This type can only be used if the invoice relates to the delivery of goods and services before 01-01-2019.
VAT Input tax
Btw Voorbelasting kan worden gebruikt als het een Nederlandse factuur betreft en er op de factuur een mix van btw 21%, 9% of 0% is gebruikt.
Acquisitions from wothin the EU (0%)
This type is used by Yuki when there is no VAT on the purchase invoice and the customer's country (debtor) is an EU country outside of the Netherlands.

ATTENTION!
It must be clear that the goods were purchased in the Netherlands. A hotel invoice from Germany does not meet this rule because the services were provided in Germany, not in the Netherlands. The goods/services have therefore not been imported.
Import outside the EU (0%)
This type is used by Yuki when there is no VAT on the invoice and the customer's (debtor's) country is outside the EU.

ATTENTION!
It must be clear that the goods were purchased in the Netherlands. A hotel invoice from the US does not comply with this rule because the services were provided in the US, not in the Netherlands. The goods/services have therefore not been imported.
VAT Reverse-charge (0%)
This type is widely used in the construction industry. The supplier does not have to pay the VAT themselves but shifts the payment obligation to the customer. The supplier is located in the Netherlands. The invoice does not mention VAT (the VAT amount is 0.00). However, the invoice often includes a note "VAT reversed". This applies to the entire invoice.

When maintaining the VAT rates, a VAT type must be created with a 9% or 21% VAT (for a detailed description, see article Set VAT rate).
VAT 0%
A limited number of goods and services are subject to a so-called zero rate. Examples include insurance, road tax, etc. In that case, we choose 0% VAT for purchase invoices.
VAT Non-deductible
It's never stated on an invoice that it's not deductible. VAT (21% or 9%) is simply stated on the invoice, however, the tax authorities do not allow the recipient to reclaim it. Examples include lunches, dinners, and various items intended for the owner or staff (a small gift). In Yuki, you simply enter the VAT amount and then choose 'Non-deductible' under VAT type. The total amount of the invoice is then expensed (including the VAT amount).

Work related costs scheme (WKR)
It gets a bit more complex when it comes to canteen costs. In that case, the tax authorities will check whether the total of all costs incurred for the employee's benefit is higher than 227 euros per employee (this includes gifts, Christmas presents, and canteen costs). If that's the case, the VAT on these costs is no longer deductible. Since we only know that later in the year, we always book these costs with VAT deducted in Yuki. It is up to the accountant later to determine whether these should still be corrected at the end of the year.