With the passing of the year 2024, it is also time for the last VAT return for 2024. In this last VAT return of the year, a number of points of attention must be taken into account. In this alert, we would like to make you aware of some of these points of attention.
VAT correction for private use of company car
First of all, if a company car is used for both business and private purposes, a VAT correction must be made for the private use of the car. Based on a comprehensive mileage administration, it must in principle be determined to what extent the car was used for private purposes (commuting also counts as private use). Based on this, a percentage of the deducted VAT in respect of the car expenses must be corrected. If there is no comprehensive mileage administration, the VAT correction for private use can be determined on the basis of a flat-rate calculation. The VAT correction in this case amounts to 2.7% of the list value of the car (including VAT and BPM). If no VAT was reclaimed when the car was purchased, or if the private use takes place later than 4 years after the car was taken into use, a VAT correction of 1.5% of the list value may be applied.
Please note that if a personal contribution is paid by an employee for the use of the car, this may need to be taken into account when calculating the VAT adjustment. Please contact one of our VAT specialists for this.
Other private use - BUA
In the last VAT return of the year 2024, a VAT correction may also have to be made for expenses that you, as an entrepreneur, may incur as a business, but which are (also) of a private/consumptive nature. Examples include canteen provisions, business gifts, staff outings, Christmas hampers, as well as provisions such as telephones or housing. The right to VAT deduction is excluded for these if the expenses in a year exceed € 227 (excl. VAT) per beneficiary (entrepreneur, employee or relation). If this limit is exceeded, then the VAT on the expenses incurred cannot be deducted in its entirety. Govers has a BUA tool for calculating the possible VAT correction. Please contact one of our VAT specialists.
Review
Revision means adjusting the VAT originally deducted based on the actual use of a good or service. If, when purchasing a good or service, you may or may not have deducted VAT based on the intended use (VAT-taxed or VAT-exempt), but it later turns out that the actual use differs from this, the VAT deduction must be revised. This means that you have to refund part of the VAT or, on the contrary, can reclaim additional VAT, depending on whether the good or service was used for more exempt or taxed supplies than originally intended. The time limits for review are as follows: for immovable property, a time limit of nine years after the year of occupancy applies, and for movable property that is depreciated for income tax or corporate income tax purposes, a time limit of four years after the year of occupancy applies. Should the use have changed in 2024 and the taxed use differs by more than 10% from the year of commissioning, the VAT deduction must be corrected in the last return of 2024. We are happy to look at this sometimes complex calculation with you.
Pro rata
If you perform both taxed and exempt services, the VAT on general expenses can be deducted on a pro rata (partial) basis. This is the ratio of VAT-taxed turnover to total turnover. At the end of the year, the final pro rata deduction must be calculated. This final calculation may lead to a correction of the previously enjoyed VAT deduction in 2024.
In principle, the pro rata should be calculated based on turnover ratios. The Dutch VAT regulations also offer the possibility to base it on actual use (such as on the basis of m2, for example). This mainly refers to (un)movable investment goods. For other goods and services, the pro rata should generally be based on turnover ratios, unless you can demonstrate that actual usage deviates significantly from turnover ratios. In principle, it is not permissible to base the deduction for part of the general expenses on actual use and for the other part on turnover ratios.
Other
Finally, we would like to point out some action items for the early 2025:
- In order to opt for VAT-taxed property rentals, the tenant must use the property for at least 90% VAT-taxed activities. At the end of the year, the tenant must check whether it has met the 90% standard in the year 2024 and if not, the tenant must notify the landlord within 4 weeks after the end of 2024.
- When selling real estate where VAT-taxed delivery has been opted for, the buyer must declare in writing that during the year of delivery and the following year at least 90% of the real estate purchased was used for VAT-taxed services. If this is not met, the buyer must notify the seller and the tax authorities within 4 weeks.
- The deadline for filing a suppletion has been tightened. As of January 1, 2025, this deadline is 8 weeks after it is determined that a return is incorrect or incomplete. If you do not file the supplement on time, the Tax Authorities can impose an offense penalty that can result in a fine of 100%. Previously, the deadline for filing the suppletion was "as soon as possible. If you knew before Jan. 1, 2025 that you needed to file a suppletion for an earlier period, the suppletion must be filed no later than Feb. 26, 2025, to avoid an offense penalty.
- If you need to file a supplement for the year 2024, we recommend filing this supplement as soon as possible, but no later than April 1, 2025, to avoid tax interest. Does the VAT amount to be corrected amount to € 1,000 or less? Then the supplement may be processed in the next VAT return and no separate supplement needs to be filed.
In conclusion
The last VAT return of the year differs from the VAT returns for previous periods. Thus, it is important to prepare a careful and accurate final 2024 VAT return to avoid errors in the VAT return. Ensure that all private use adjustments, revisions and pro rata calculations are made. If in doubt, contact your relationship manager or one of our VAT specialists to ensure that your return is complete and correct. You can reach us at 040-2 504 504 or at btw@govers.nl.