VAT and Taxes

Income tax vs VAT; what’s the deal?

If you've ever struggled with differentiating between income tax and VAT return, then prepare to be enlightened! When you work for a company as an employee, the only item of concern is the income tax return. However, when you start freelancing as a High-Flyer you are also obligated to file a VAT return.

What is VAT return?

When you start working as a student freelancer, you have to pay VAT on your turnover - which is your hourly rate. This happens every quarter, on fixed dates. To do this, you fill out your revenue and then use the appropriate portion of the money you were paid to then pay the Tax authorities. The following dates apply for quarterly returns, so be sure to fill out your tax return before the following:

Quarter 1 (January until March): Deadline April 30th

Quarter 2 (April until June): Deadline July 31st

Quarter 3 (July until September): Deadline October 31st

Quarter 4 (October until December): Deadline January 31st

But wait, you might ask, doesn’t that mean I am losing money? No, in essence, the amount of money you were given by your client is your revenue (hourly wage) plus money to be used for your VAT return. This amount can be found in your invoice, so you always know how much to put aside for this reason.

Have you been away from the freelancing world for a bit, or otherwise not worked for some time? Then you still have to declare €0 on your VAT form. This is done to avoid being fined by the tax authorities and you should always take the time each quarter to take a look at your freelance turnover.

What is an Income tax return?

An income tax return is like a first cousin. Familiar to most in the Netherlands as the tax you pay on your income on an annual basis. Though a freelancer, take note that you still have to file income taxes per annum. Help with your tax returns? Minite runs a quarterly webinar on how to file your taxes, for free. Find the dates and times here.


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