The tax authorities began to respond to “zero” VAT reports by possibly closing the business. What to do?

From January 2021, the Dutch tax service began sending letters to entrepreneurs who did not pay and did not withhold VAT for one year or more - in other words, they submitted the so-called "zero" reports. This gives the tax authorities reason to assume that the economic activity of this EMZ / ZZP has ceased, and the company has closed altogether.

How should you, as a business owner, react if such a letter came to your address?

There are two possible options here, depending on your actual situation.

Your business is really terminated

If this really happened to your business, then you do not need to react to the letter that has come. The tax authorities will independently cancel your ob-number (sales tax number, otherwise VAT), and then the validity period of your btw-id (VAT identification number) will automatically expire. The tax office will then send you another letter informing you of this, and will no longer expect new VAT reports from you. But we draw your attention to the fact that before such a decision by the tax authorities, VAT reports already prepared on time must be submitted.

In addition, do not forget that in the event of an official termination of activities, you may have to pay VAT on the value / residual value of the assets on the EMZ / ZZP balance sheet when they are transferred to your private use. Calculate the amount of such VAT and include it for payment in your last VAT report before the closure of the business.

You continue your business

An entrepreneur who received the above letter from the tax office, but did not actually stop his business, must no later than March 2, 2021 send a response letter to the tax authorities containing the following information:

• characteristic (special code) from the received letter and / or ob-number;
• why for at least one year there was no data in the VAT reports for your business;
• your contact phone number;
• Your email address;
• on the basis of which the benefit applies to your business (ontheffing), release (vrijstelling) or special regulation (bijzondere regeling).

After receiving such a letter, the tax office will contact you - this can happen either in writing or by telephone. And after contacting you, she will decide the further fate of your business.

***

If you received a similar letter from the tax office, and you are still confused about what to do - contact us, and we will definitely advise and help you!