Are you a Dutch entrepreneur supplying goods to customers in the EU who do not file VAT returns? From July 1, 2021, you'll need to declare VAT in the EU country where the goods are delivered once your total EU sales exceed the €10,000 threshold.
There are two options for filing your VAT:
The Union Scheme: Submit a quarterly VAT return covering all VAT within the EU.
Filing VAT in each individual country: Submit returns separately for each country.
Both options require some administrative changes.
You must apply the VAT rate of the country you're selling to. For instance, Germany applies a 19% VAT, so if you're invoicing a German customer, the invoice must reflect this 19% rate.
How to Invoice Under the New EU VAT Directive for E-commerce
Before invoicing with the 19% VAT, a few settings must be configured in your accounting system.
Create ledger accounts
You need to create two ledger accounts.
To create ledger accounts follow the steps below:
Navigate to Settings in the left-hand menu;
Choose General ledger accounts and click New;
General ledger 1:
Number: 8500;
Description: Omzet 19% Duitsland;
Type: Revenue (profit and loss);
Account type: Expenses/purchase/revenue account
General ledger 2:
Number: 1560;
Description: BTW 19% Duitsland;
Type: Balance;
Account type: VAT account
Set up the VAT rate
Once your ledger accounts are created, you need to set up the 19% VAT rate.
To create the VAT rate follow the steps below:
Navigate to Settings in the left-hand menu;
Choose VAT and click New;
VAT Rate:
Name: 19% Duitsland;
Percentage: 19;
General ledger: 1560 - BTW 19% Duitsland;
To be used on: Sales invoices;
Show VAT: Show the vat on the invoice
Create an invoice
After setting up the ledger accounts and VAT rate, you can now create an invoice. When drafting the invoice, select the 19% Duitsland rate under the VAT section.
Repeat the same process for other EU countries, using the appropriate descriptions and VAT rates for each country.