In the accounting departments of many countries, two methods of recognizing and accounting for income and expenses (based on this, and VAT on them) are used - on the actual receipt of funds (cash method) and on the received invoices (invoice method).
At the same time, in the Netherlands the textured method (factuurstelsel) is more common, is the default, and is used by most people in business. This is a method in which accounting is kept by the date of issue of any invoice (invoice) / check - both for sale and for purchase. It does not depend on the date of payment, and it is when using this method that the concepts of advance payment, prepayment, subsequent payment, etc. arise.
When applying the cash method (casstelsel) all receipts and expenses are recorded by the date of the transaction in the bank statement or in the cash book. And it is this date that is the starting point in the formation of the data of this or that report.
The cash method is especially relevant for enterprises, in which 80% of their activities take place with individuals.
According to Dutch law, the use of the cash basis is compulsory for entrepreneurs engaged in the following activities:
- retail trade (including online stores);
- trade in the markets;
- shoe workshops, namely shoe repair;
- hairdressers;
- window washers;
- laundries;
- bicycle repair shops;
- cosmetologists and skin care;
- wallpaper gluers;
- upholsterers (furniture, car interiors, flooring, windows and walls in the house, etc.);
- horeca enterprises - hotels, restaurants, cafes, etc .;
- driving schools;
- lawyers practicing alone;
- entrepreneurs who have more than 90% of their turnover in goods or services sold to individuals.
You can refuse to use the cash method, but such a refusal must be justified and confirmed by your accounts / administration.
If you are not part of the group of entrepreneurs mentioned above, but have been selling at least 1% of goods or services to individuals for more than 80 year, then you can submit a request to the tax office for permission to use the cash method.
We draw your attention to the fact that accounting at the enterprise must be maintained during the calendar year using only one of the methods. Accordingly, it is necessary to switch from one method to another at the very beginning of the year, namely in January. That is, right now is the most convenient time to do this, so weigh all the pros and cons and - go!
If you have any questions on this topic, or you need help in filing an application with the tax office to switch to another accounting method, do not hesitate and contact us!
And we will be happy to help you!
Publication Date: 08.01.2021
