Working with VAT

When financing your initiative or project, always make a balanced budget. In it you include costs and income. Chances are you will have to deal with the offsetting of sales tax, or value added tax. This is called VAT. This applies, for example, if you sell products (tickets, drinks, food) or services (work on behalf of third parties). So you pay VAT that you have collected through invoices sent or, for example, because the public has bought a ticket. On the other hand, you yourself pay VAT on goods you purchase or, for example, staff or artists you have to pay. You can reclaim this VAT later. It is also possible that your organization is not liable for VAT, i.e. that you are not a company for VAT. Then other rules apply. Before starting an initiative or project, always contact the tax authorities to determine whether you are liable for VAT. Whole books have been written about VAT and it can be very complex. On this page you will find the most important information about working with VAT. If you want to go even deeper into it, it is advisable to contact the tax authorities or a tax consultant or accountant.

Different VAT rates

In the Netherlands we have to deal with different VAT rates for the various goods and services you supply or purchase. Especially if you are working in the cultural sector, it is possible that you have to deal with several VAT rates for one project or initiative. We have summarized it for you below, but always check with the tax authorities:

21% VAT

This is the most common rate known in the Netherlands. It applies to almost all goods and services, so it is easier to name the exceptions to the other rates.

9% VAT

This tariff is frequently encountered in the cultural and artistic world. It is applied to goods such as food, books and art. In addition, you will also encounter it for services such as tickets to museums, cinemas and stage performances. Performances by performing artists also fall under this rate. The condition is then that the public can listen or watch them directly or indirectly.

0% VAT

This rate is most commonly encountered with goods and services imported from countries within the EU. The 0% VAT rate also applies to cultural education, for example.

Exempt from VAT

Some goods and services are exempt from VAT. For the cultural sector, this includes the services of composers, writers and illustrators. Lectures and excursions are also exempt from VAT in many cases. Finally, you may be a socio-cultural institution that does not have to deal with VAT at all.

Dealing with VAT

It is very important that you properly note the VAT in your budget so there are no surprises. If you have income, it is best to set aside the VAT you charge on that income immediately, because you will have to pay it back later. If you have a good idea of the costs and thus the recoverable VAT, you can also set aside a little less. However, it is advisable to keep a margin in case something changes. At least then you will have reserved enough. On every receipt and on every invoice you receive, VAT is listed. It is up to you to include the VAT on invoices you send to third parties or tickets you sell.

VAT and the tax return

In most cases, you file quarterly sales tax returns, with exceptions. That is the time when the tax authorities ask you to declare and account for VAT. You will be asked what the supply of goods and services is and the corresponding sales tax, or VAT collected. A distinction is made here between the different VAT rates. You are also asked what goods and services you have supplied without having calculated VAT on them. Further on in the return you fill in the input tax. This is the VAT you have paid yourself when purchasing goods or services. Here you do not have to distinguish between the different VAT rates but you can simply fill in the total amount. At the end of the declaration the input tax is deducted from the turnover tax and you must transfer the result to the tax authorities or they will transfer the result amount to you. On the tax return for the relevant fiscal year it will be recalculated again.

VAT and subsidies

When you receive a subsidy, the government does not take VAT into account. The amount credited to your account includes VAT if you are subject to VAT and for those who are not, the amount excludes VAT. So the person who is liable for VAT makes a budget excluding VAT. The person who is not VAT liable makes a budget including VAT.

If, from your expertise, you yourself have knowledge that would fit this topic, or if you see opportunities to improve this text, we look forward to receiving your message at info@cultuuracademy.nl.