Bookkeeping & VAT (2024)

Now in 2024, I am still wrestling with how to effectively incorporate VAT in a spreadsheet bookkeeping system. This article is based on two Dutch single-owned (ZZP) administrations that I maintain:

An IT/marketing service company. Customers are located in NL (always 21%), suppliers worldwide
An art production company. Customers in NL (21%) and mostly outside EU (0% VAT). Hardly any suppliers.

One nett account or multiple accounts?

One account

In a bookkkeeping system, some entities have just one account, for both additions and subtractions. An example is the account Private withdrawal: It's used for withdrawing money from the business, but in the rare situations that I need to shore up finances, I use this same account to transfer money from private to business - And it works fine.

The problem is, that you can't see how much VAT is due for the next period, because the account VAT Due NL High also contains the numbers submitted to the Belastingdienst:

                        Accounts     Revenue   Accounts   VAT Due
Mutation                receivable   NL High   payable    NL High
---------------------   ----------   -------   --------   -------
Sales 2023-05 Bob       € 1,210      € 1,000                € 210
VAT submission 2023Q2                          € 159      - € 159
---------------------   ----------   -------   --------   -------
Sum                     € 1,210      € 1,000   € 159        €  51

Two accounts

Some entities have different accounts, depending on whether transactions are positive or negative. Accounts receivable and Accounts payable is probably the best example. Rather than knowing the nett difference, I want to be able to track each entity on its own.

Here is an example of how this could be applied to VAT Due NL High.

                                                                    VAT Due
                        Accounts     Revenue   Accounts   VAT Due   NL High
Mutation                receivable   NL High   payable    NL High   Submitted
---------------------   ----------   -------   --------   -------   ---------
Sales 2023-05 Bob       € 1,210      € 1,000                € 210
VAT submission 2023Q2                          € 159                - € 159
---------------------   ----------   -------   --------   -------   ---------
Sum                     € 1,210      € 1,000   € 159        € 210   - € 159

It only seems so strange that amounts at VAT Due NL High Submitted are negative. Some thoughts:

These are just the earlier substractions to VAT Due NL High but moved to a column of their own
They submitted amounts do effectively lower the number for VAT Due NL High, so it isn't that strange
Maybe move VAT Due NL High Submitted to the other side of the sheet, so figures become positive again? Let's keep it where it is: Next to the 'non-submitted' varian

Conclusions

Use two accounts per entity.

Various

VAT submission is more than copying some figures

The data that is needed for VAT submissions, is not a matter of just copying some figures from the bookkeeping:

When VAT is done per quarter, figures will be sums over those three months. Additionally:
4a - purchases non-EU - revenue is a sum comprising several accounts
4b - purchases EU - revenue is a sum comprising several accounts

Don't use same names as on VAT submissions

Maybe kinda weird remark, but I fing it quite messy to use the exact same wording as what the Belastingdienst uses on their VAT submission webforms.

Separate sheet for VAT

Probably best to have a separate sheet for tracking VAT, rather than including it on the All sheet as done so far: Somehow that feels like shoehorning it.

Review: VAT submission

It's the VAT submission at the Belastingdienst website, where everything comes together. So let's review what's needed there:

Page 2: Domestic achievements

VAT submission - Page 2: Binnenland

Information needed at VAT submission - Page 2: Domestic
Category	Fields	Name & Description	Consequences concerning bookkeeping
1 - Domestic achievements	1a: 1a.1: Domestic achievements - High - Revenue 1a.2: Domestic achievements - High - VAT	Domestic achievements - High Domestic revenue (without VAT) charged at high VAT rate and corresponding VAT amount. There is no distinction between services and products here	This is basically the sum of the bookkeeping fields Revenue NL High over the designated period
1 - Domestic achievements	1b	Domestic achievements - Low As 1a, but now when the lower VAT rate is applied, e.g., for sales of original art work (which has never happened so far) → Not relevant	Not relevant
1 - Domestic achievements	1c	Domestic revenue - Other	Not relevant
1 - Domestic achievements	1d	Private use	Not relevant
1 - Domestic achievements	1e	Domestic revenue - 0% or similar	Not relevant
2 - Reverse domestic VAT	2a	Reverse domestic VAT	Not relevant

Page 3: Abroad

VAT submission: Page 3: Buitenland - Abroad

Information needed at VAT submission - Page 3: Abroad
Category	Fields	Name & Description	Consequences concerning bookkeeping
3 - Achievements abroad	3a	Products exported outside EU This is quite a strange entity, and actually not business economy-related. Appearantly, Belastingdienst just wants to know for what amount products have been exported to other EU countries. It's only about products, not services. Also, no VAT amount is asked for (export outside EU is always free of VAT) Here, products mean physical products. This can be deduced from following this wizard, which has several questions about how the goods are transported, and where the goods at the moment of sales. 'Somewhere in the cloud' isn't an option This is not relevant. I thought it was relevant for the art business, but it isn't: It never involves physical goods	Not relevant
3 - Achievements abroad	3b	Products/services exported inside EU Both products and services delivered to customers inside the EU (but outside NL). The VAT amount isn't asked for here The actual VAT submission should be done through the EU unieregeling [1], [2] Not relevant for IT/marketing or the Art business: The former only sells domestically, and the latter only outside the EU	Not relevant
3 - Achievements abroad	3c	Distance sales EU	Not relevant
4 - Purchases from abroad	4a: 4a.1: Purchases non-EU - Revenue 4a.2: Purchases non-EU - VAT	Purchases non-EU Belastingdienst assumes that these achievements are always charged without VAT You have to calculate and apply VAT here yourself: What would be the VAT rate and amount if it was a domestic achievement? Also include this VAT amount at pretax on the last screen, so you effectively don't pay any VAT In reality, quite some achievements outside EU do include some kind of locale VAT, sales tax, federal tax or whatever. There is a procedure to fix this, but that procedure is complicated and requires the cooperation of the selling party. This makes this procedure quite infeasable Solution: Include here the amounts that were actually payed, regardless whether they were ex- or including whatever local tax. Effectively, those taxes are outside issues	Accounts that deal with such purchases (only costs or also balance accounts?), should be designated domestic, EU or non-EU, to be able to sum over them for VAT submissions When one company sells from more than one of these geographic regions, a bookkeeping accounts need to be maintained for each region
4 - Purchases from abroad	4b: 4b.1: Purchases EU - Revenue 4b.2: Purchases EU - VAT	Purchases EU	Yes - Same as 4a

Page 4: Pretax

VAT submission: Page 4: Voorbelasting - Pretax

Information needed at VAT submission - Page 3: Abroad
Category	Field	Name & Description	Consequences concerning bookkeeping
5 - Pretax	5a	Due VAT categories 1-4 This is simply the sum of due VAT from earlier categories - You can't enter anything here. Not relevant	--
5 - Pretax	5b	Pretax The pretax that has been incured by the company. It's the sum of these entities - These are all internal entities. Belastingdienst only wants to know the sum: 5b.1 - Pretax NL 5b.2 - Pretax EU - VAT has to be added to both pretax and due 5b.3 - Pretax non-EU - VAT has to be added to both pretax and due.	See below

Accounts & checklist

From the tables in the previous chapter, we end up with the following accounts. These are all the accounts that are needed, both for the Art Business and the IT/marketing business. Note how few accounts these actually are:

Accounts needed as a consequence of VAT submission requirements
Category & field	Code	Account	Notes
1a - Achievements NL - High	1a.1	Revenue NL High
	1a.2a	VAT Due NL High
	1a.2b	VAT Due NL High Submitted
4a - Purchases non-EU	4a.1	Separate account for each non-EU supplier	The sum at 4a.1 needs to be filled in at 4a. Leveringen/diensten uit landen buiten de EU - Omzet. This figure is regardless whether such a product/service would be charged with VAT in NL (e.g., non-EU banking costs)
	4a.2a	VAT Due Non-EU
	4a.2b	VAT Due Non-EU Submitted
4b - Purchases EU	4b.1	Separate account for each EU supplier	Again: This is regardless whether these purchases would involve VAT if they were domestic (e.g.: Costs of EU bank would be free of VAT domestically)
	4b.2a	VAT Due EU
	4b.2b	VAT Due EU Submitted
5b - Pretax	5b.1a	Pretax NL	Concerning purchases abroad, the VAT according to the NL system, should be added to both VAT Due and Pretax - Hence these non-NL pretax accounts
	5b.1b	Pretax NL Submitted
	5b.2a	Pretax EU
	5b.2b	Pretax EU Submitted
	5b.3a	Pretax non-EU
	5b.3b	Pretax EU Submitted