Turnover tax for freelancers

What is turnover tax?

Turnover tax is a tax you have to pay as an entrepreneur in the Netherlands on your turnover. VAT (Value added tax) is the tax you pay on your turnover. VAT you have paid yourself on business expenses is usually deductible.

VAT rates

There are three VAT rates, 21%, 9% and 0%. The general VAT rate is 21%. The other rates do not apply to freelancers at CodeHive. In Dutch VAT is btw (belasting over toegevoegde waarde).

Administration

As a business owner, you are required to keep and maintain records for VAT purposes. You are required to keep these records for 7 years. It is important to include the correct information in your invoice. This information must be included on your invoice:

• Your full name and that of the customer
• Your full address and that of the customer (the address where the company is located)
• Your VAT identification number (the “btw nummer” with NL in front of it)
• Your Chamber of Commerce (KvK) number
• The date the invoice was sent
• An invoice number
• What you are invoicing: what services did you provide, how many hours?
• The dates you provided the services
• The amount you charge, excluding VAT
• The VAT rate that applies (21% in the case of freelancing at CodeHive)
• The VAT amount

For convenience, you can use websites such as Moneybird. From here you can send invoices and keep your accounts.

Pay close attention to this:

There can still be some confusion about the following points. As a self-employed person, it is important to pay close attention to the following things:

• The date in your invoice is leading, not the date you received your money. Example: I send an invoice December 30, 2023, it is paid January 2, 2024. This turnover falls in Q4 2023.
• Input tax is the VAT you pay on purchases you make for your business, one of the conditions is you have an invoice that lists the VAT. Purchases are for example a new keyboard or office items. Note, these rules apply as to what is and what is not covered by input tax.
• Even if you have no turnover during a quarter, you still have to pay income tax on that quarter. You simply fill in 0 at turnover. If you do not do this, you will receive a fine from the tax authorities. You will also receive this penalty if you are late filing your turnover tax (you have up to 30 days after the last day of the quarter in question). Example: you file a tax return for Q4 2023 on February 1, 2024, you will receive a penalty.
• Put the VAT return deadlines in your calendar, or sign up for our reminder.
• These are the deadlines for 2024:
  • Q1 2024 must be in by April 30, 2024
  • Q2 2024 must be in by July 31, 2024
  • Q3 2024 must be in by October 31, 2024
  • Q4 2024 must be in by January 31, 2025