Don’t forget your advance payment for December 2016!

Taxpayers who submit their VAT returns monthly must check annually whether or not they are required to pay the December advance for VAT payable on transactions performed during the month of December.

1. Introduction

This obligation is only applicable to those submitting their returns monthly, and taxpayers who submit their returns every quarter can thus disregard the measure. The latter group are anyway already obliged to pay an advance on the VAT payable for the fourth calendar quarter.

If a December advance is payable, then the sum must be paid by 23 December 2016 at the latest into the account of the tax authorities. The same payment instructions apply to this as for the monthly VAT payments.

2. How do I determine the sum of the advance?

The taxpayer can choose between two ‘methods’ for determining the sum of the advance payment:

  1. Either the VAT that is effectively payable for transactions performed between 1 and 20 December is calculated;
  2. Or the sum of the payable VAT, as stated on the VAT return for November, is taken into account.

The second method is the easiest one, given that it is based on the VAT return for November, which must be submitted no later than on 20 December. The sum stated in section 71 of the November VAT return is thus simply paid twice.

On the other hand, the first method requires that an interim VAT return be compiled for the period between 1 and 20 December, and the advance payment is determined, just like with the normal VAT return, by taking the difference between the payable VAT and the deductible VAT.

3. Can one optimise?

While the first method may require more work, a comparison of the two could be well worth your while. That’s because the method that means a lower advance VAT payment also means an improved cash flow. 

The method that is best for each taxpayer depends on their specific situation. Weighing up whether the effort involved in employing the first method is worth the advantage it could provide can also play an important role in this respect.

The December advance that is paid is later set off against that actual VAT payable for the month of December 2016 and can thus be demanded back by an express application for such (using the VAT return), insofar as the conditions for this are fulfilled. This December advance can naturally also be set off against future payable VAT sums.

A VAT credit balance of at least €245 is enough to demand a VAT refund at the end of the calendar year.

4. How do the tax authorities know which method I used?

The tax authorities can see which method the taxpayer used from section 91 of the VAT return for December (to be submitted on 20 January of the following year at the latest).

If the advance payment was determined using the second method – i.e. based on the transactions performed in November – then section 91 must be left blank.

However, if the first method was used – based on the VAT payable for the period between 1 and 20 December – then the sum of the advance payment must be stated in section 91. Moreover, an annexe must be compiled containing the calculation for the December advance payment that must be included when the VAT return for December is submitted.
Please note that, if the first method is used and no advance is payable, then you must state ‘0.00’ in section 91. If you do not do so, the tax authorities will assume that you opted for the second method, and you could lose out if the VAT return for November meant that you owed VAT.

5. What happens if I ‘forget’ to pay an advance?

If the December advance payment is not made or not made in time and/or if section 91 of the VAT return is wrongly filled in or left blank, as a result of which the tax authorities are incorrectly informed of the method employed, this can result in late-payment interest amounting to 0.8% on the sum of the VAT advance payment.

What are the consequences and the opportunities?
Buying real estate in the Netherlands: are there tax benefits?
In recent years the purchase of property in the Netherlands has seen an uptick, especially in the beachside town of Cadzand, where 1,500 new apartments and houses are being be built between 2008 and 2020. This is the perfect opportunity to examine the (tax) consequences of buying real estate in the Netherlands and the opportunities it offers in respect of asset and inheritance planning. This artic
A reminder of the most significant tax-related points
‘For free’ is not always ‘VAT-free’
 ‘A free sample, a gadget with a corporate logo, rewarding faithful buyers and suppliers with a small gift…’ Every company is familiar with this situation, but are they also aware of the tax-consequences of these generous gestures? The tax authorities recently published a circular as a reminder of the most significant tax-related points for attention in this respect.  The rules&
A refresher on the current state of affairs
Interest on savings accounts with foreign institutions: Belgian rapped over the knuckles again for its exemption
With tax return season lurking on the horizon it is a good idea to have a refresher on the current state of affairs with respect to the exemption for interest on savings accounts. The general rule as regards the exemption At the present, the first bracket of €1,880 (for tax year 2018, base sum of €1,250) of the income from regulated savings accounts (those accounts where the bank complies
The regional benefits have diverged completely
Home-owner taxes in the tax year 2017
'Own homes' have been a regional authority matter, since 2014. Even then, it was predicted that this would result in serious fragmentation and complication of the fiscal benefits for own homes. 
Powerful weapon for combating against fraud
Prejudgement administrative attachment for VAT gets repackaged
One of the measures used in the battle against tax fraud involves the amendment of the extant regulations for prejudgement attachments that VAT officials can levy on moveable property when, during an inspection, they have established that there are matters that indicate major fraud (organised or not). An example would be when they encounter goods in a warehouse that have been part of a carousel sc
There are a number of (negative) consequences
What happens if a tax audit decides that your company is no longer ‘small’?
From a tax perspective there are a number of advantages to a company being considered ‘small’. In this article we will take a brief look at those advantages. However, there are also considerable consequences when, during a tax audit, a company is deemed to no longer be small, and these not only affect the company itself, but others too.   A small company under article 15 of the Compani
The published circular creates clarity
Are fundraising dinners VAT-liable? We clear up the exemption for charitable support
When a VAT-exempted society decides to host an event for the purpose of raising funds, such as a fundraising dinner, it was often uncertain as to whether the event was exempt from VAT. In the wake of a legislative amendment in 2016 a circular has now been released to clear up matters. Introduction The VAT Code contains an exemption for the delivery of goods and services provided by specified s
The struggle against fiscal fraud
FATCA: Prevention is better than reclamation
The US Foreign Account Tax Compliance Act (FATCA) has been in effect since 1 July 2014. The law is part of the war on tax fraud and is aimed at tackling international tax avoidance by American citizens through a new system of global automatic data exchange. What obligations have been introduced under FATCA? Under FATCA certain identification, reporting and/or content obligations are imposed f
Limited to federal & Flemish regulations
Target group reductions for social security: Are you still aboard?
As a result of the 6th state reformation, the Regions now have the authority to oversee personal target group reductions (doelgroepverminderingen) in respect of the employer’s contribution to social security. Flanders has opted to simplify the target group system, as a result of which a number of existing measures have been scrapped and new target group reductions have been devised for the young
Good news for separated parents with kids in college
Joint parenting for tax purposes: children of age also count
At the start of this year the authorities published a circular explaining the amendment to the article allowing joint parenting for tax purposes to now also be applied to children of age.

Subscribe to our newsletter