On July 12, 2016 the Dutch Ministry of Finance opened a public consultation on an intended simplification of refund procedures regarding VAT and if applicable of energy taxes, water taxes and waste taxes in case of irrecoverable receivables. The consultation runs from July 12, 2016 through August 14, 2016.

The intended changes regard situations in which an entrepreneur charged VAT (or one of the taxes mentioned above) and remitted this VAT charged to the Dutch authorities, after which his/her customer does not pay or only partially pay(s) the remuneration due. Under current law the entrepreneur is then under conditions entitled to a refund of the VAT (or the other taxes) he/she remitted to the Dutch authorities. In order to receive the refund, the entrepreneur has to file a request for a refund with the Dutch tax authorities. The most important proposed change is that under the proposed legislation an entrepreneur automatically will be entitled to a refund of the VAT (or other taxes) remitted to the Dutch authorities if and to the extent that the customer still did not pay the remuneration 1 year after the renumeration became due.

A second simplification is that under the proposed legislation the entrepreneur will longer have to file a request for a refund, but can deduct the amount for which he is entitled to a refund from the amount of VAT due on a VAT return. If at a later moment the entrepreneur (partially) receives the remuneration, he again has to remit the amount of VAT that relates to the (part of the) remuneration received by the enterpreneur to the Dutch tax authorities.

Another proposed change is to align the terms after which a right to a refund of VAT comes to live in different situations. Under current legislation these terms are different for situations in which the customer has to pay the remuneration to the entrepreneur that sold the goods/rendered the service and the situations in which the entrepreneur has assigned the receivable to a third party.

Click here to be forwarded to the consultation page as available on the website of the Dutch Government.

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