Keeping your international business records in order

When you do business internationally, your administration has to meet legal requirements. You use different VAT rates and put your foreign customer's VAT ID on your invoice. You also keep proof of the export of your goods from the Netherlands. There are different rules for doing business inside or outside the EU. From April 1 2024, new rules apply if you use the zero VAT rate. In particular, regarding proof of the export of your products from the Netherlands. 

Administration inside the EU

If you sell products and services to EU customers, you list your foreign customer's VAT ID on your invoice. You retain proof of the transaction for your VAT return. And if the sales exceed a threshold amount, you file an Intrastat report with Statistics Netherlands (CBS).

VAT ID of foreign customer

There are legal requirements for invoices to Dutch customers. You need these for your VAT administration. For example, name and address of yourself and your customer, and your VAT id. 

When you do business in other EU countries, you also list your customer's VAT ID on the invoice. Before you make a delivery to a customer in a different EU country, check whether they have a valid VAT ID. Also check if  they are entrepreneurs (in Dutch) in a different EU country. If you put 0% VAT on your invoice and the Tax Administration finds out your customer does not file VAT returns themselves, you will have to pay VAT on the delivery yourself. The Tax Administration will send you an assessment for the amount.

Supplying goods

The supply of products to business customers in other EU countries is called an intra-community transaction (ICP). After you have checked your customer's VAT ID, save a screenshot of this data in your records.

Your invoice has to contain additional data. You usually invoice an intra-community transaction with the 0% VAT rate. You state that the delivery is an intra-community transaction. To do so, you include the wording ‘tabel II, onderdeel a, post 6, Wet OB 1968’ (Table II(a), item 6, Turnover Tax Act 1968), or ‘artikel 138, lid 1, Richtlijn 2006/112’ (Article 138(1), Directive 2006/112). ’. You decide which of these texts you use, and in which language.

You deliver the goods to other EU countries with 0% VAT. Your customer pays VAT in their own country. There are some exceptions to this, for example a so-called ABC supply chain. Or if your customer is a private individual, and does not run a business.

Proof

You must be able to prove through your records that you transport goods to another EU country, and that the goods have left the Netherlands. You can prove this by retaining, for example:

• copies of freight bills/letters
• transport declarations for pick-up transactions (in Dutch)
• transport insurance policies

For VAT, you must keep your records for seven years (in Dutch). Make sure you can show these records quickly and easily in the event of an audit. 

Selling to private customers

Sometimes you sell products to private individuals. Through your webshop, for example. For these so-called distance sales within the EU, there is a common threshold amount of €10,000. Up to this amount you charge Dutch VAT. Do your total e-commerce sales to other EU countries exceed €10,000? Then you charge your customer the local VAT of the EU country. 

Providing services

When you provide services to companies in other EU countries, your customers usually calculate the VAT themselves. They pay this VAT in their own country. You send an invoice without VAT. After checking your client's VAT ID, save a screenshot of the data in your records. 

On your invoice, you state: 'btw verlegd' or 'VAT reverse-charged'. Other languages are also allowed.

For some services, different rules apply, because they are taxed in the country where the services are provided. For example, transport of individuals. This service is taxed in the country where you transport the individuals. The tax laws of that country then apply. Catering is another example, or services related to real estate.

ICP declaration

In addition to your VAT return, you must file a declaration of Intra-Community transactions (ICP) at the end of each quarter. This declaration includes the VAT identification numbers of your foreign customers. Make sure you report the correct VAT IDs. Before you file the ICP declaration you may want to check whether these numbers are still valid.

Records outside the EU

Invoices for products exported to non-EU countries do not have to contain additional details. You draw up your invoice in a language that your customer understands. You charge 0% VAT.

When you provide services in a non-EU country, the service is often taxed in the country your customer is located in. Different rules apply for VAT and drawing up invoices in different countries. The Tax Administration offers a (Dutch only )tool: ‘Diensten in en uit het buitenland’ (Services to and from abroad) to help you find out what you have to put in your invoice in which country, and where to file your foreign tax return. 

Proof

Save proof of your transactions in your records, so you can show which goods you have imported and exported, if the Tax Administration asks you to.

Export proof

You can use several documents to prove the export of goods from the Netherlands. The most common ones are:

• Customs documents you receive from Customs or your forwarding company. For example, the Confirmation of Exit (CoE): digital proof that your goods have left the EU.
• Correspondence with your foreign customer, like quotations and emails.
• Copies of transport documents.

Import proof

When you import products, you do not make invoices, but receive them from your foreign suppliers. You do retain proof in your records (in Dutch), such as:

• Your custom broker's invoice.
• Customs documents you receive from Customs, like the confirmation of your digital import declaration.
• Copies of signed freight letters.

Keeping track of your international records

To have a clear overview of your international administration it is advisable to use accounting software or an online accounting solution. It helps you stay organised. It means all your invoices in one place, and you can get quick insights into your foreign customers, suppliers, and VAT rates. For a complete overview, create several ledger accounts in your records. 

Ledger account

You book invoices into a so-called ledger account in your records. A ledger account is a group of all the income and expenses of a certain part of your accounts. You define the groups into which you divide your records. By giving each group a unique account number, you create an orderly overview of the business you have done in the Netherlands, inside the EU, or outside the EU. And that is what the Tax Administration wants to see when they check your accounts.

Example

€‎8,000 Turnover domestic
€‎8,100 Turnover inside the EU
€‎8,200 Turnover outside the EU

Your accountant or software supplier can help you partition your ledger accounts.

Diligence and good faith

If you are audited by the Netherlands Tax Administration, it is important you can show diligence and good faith. This means, for example, that you:

• Check details of new foreign customers and suppliers.
• Check VAT IDs in VIES on time. 
• Can show you keep up-to-date details in your records and do not collect them afterwards. 

Did your  foreign customer fail to supply a VAT ID? Then invoice them with Dutch VAT. This will help  prevent possible problems in the event of an audit.

Electronic invoices

You create electronic invoices, or e-invoices in your accounting software. Next, you send the invoice to your customer in xml-format. Or you attach the invoice to an email. 

If you do business with clients outside the EU, ask them if you can send an e-invoice.