VAT correction for private use of company car
If a company car is used for both business and private purposes, a VAT correction for private use is required. In principle, the extent of this private use (including commuting) must be determined on the basis of a comprehensive mileage administration system. On this basis, it is calculated what portion of the deducted VAT on car expenses must be corrected. If no comprehensive mileage records are available, the correction can be determined on a flat-rate basis. The rate is then 2.7% of the list value of the car (including VAT and BPM). A reduced percentage of 1.5% of the list value applies if no VAT was deducted when the car was purchased, or if the private use takes place more than four years after the car was first used. 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 for 2025, you may have to apply a correction to the VAT deduction of business expenses that are also of a consumptive or private nature. Examples include business gifts, staff outings, Christmas hampers and canteen distributions, as well as amenities such as telephones and housing. The right to deduct VAT lapses if the costs per beneficiary (employee, business owner or relation) in the year exceed €227 (excluding VAT). If this threshold is exceeded, the VAT on the entire expenditure is not deductible. To calculate any correction, you can use Govers' BUA tool; to do so, contact one of our VAT specialists. Revision
Revision means adjusting the originally deducted VAT based on the actual use of a good or service. If, when purchasing a good or service, you did or did not deduct VAT on the basis of the intended use (VAT-taxed or VAT-exempt), but it later transpires that the actual use deviates from this, the VAT deduction must usually be revised. This means that you must repay part of the deducted VAT or, conversely, 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 commissioning applies, and for movable property depreciated for income tax or corporate income tax purposes, a time limit of four years after the year of commissioning applies. Should the use in 2025 have changed, whereby the use differs by more than 10% from the year of commissioning, the VAT deduction must be corrected in the last VAT return of 2025. We are happy to look at this sometimes complex calculation with you. Please note that as of January 1, 2026, a revision scheme will also be introduced for so-called investment services. However, this revision scheme does not yet apply to the last VAT return of 2025. Pro rata
If you provide both taxed and exempt services, the VAT on general expenses is deductible on a pro rata (partial) basis. This deduction is determined by the ratio of taxed turnover to total turnover. At the end of the year, the final pro rata must be calculated, which may result in a correction of the VAT deduction enjoyed in 2025. Although the basic principle is that the pro rata is calculated on the basis of turnover ratios, the Dutch regulations also allow this to be based on actual use (e.g. on the basis of m2). This relates mainly to (un)movable investment goods. For other goods and services, the turnover ratio is leading, unless you can prove that the actual use deviates significantly. In principle, it is not permitted to base the deduction for part of the general expenses on actual use and for the other part on turnover ratios. Uncollectible receivables
The end of the fiscal year is also an excellent time to take stock of your outstanding receivables. You can reclaim the VAT that has already been paid to the tax authorities on bad debts when it has been established that the customer has not paid and will not pay again. The right to a VAT refund arises in any case no later than one year after the date on which the claim became due (the final payment date). A point of attention here is the method of processing. Formally, the VAT must be reclaimed in the period in which the right to a refund arose. Did this right arise in the last quarter of 2025, or is the VAT amount to be reclaimed on balance € 1,000 or less? Then you may process this correction directly in the last VAT return of 2025. Is it a correction of more than € 1,000 that relates to an earlier period in 2025? Then you must file a supplement for this. Other
Finally, we would like to point out a number of action points for the beginning of 2026: - To opt for VAT-taxed rental of real estate, the tenant must use the premises for at least 90% for VAT-taxed activities. At the end of the year, the tenant must check whether it has met the 90% standard in the year 2025 and if not, the tenant must notify the landlord within 4 weeks after the end of 2025.
- 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.
- Since January 1, 2025, the deadline for filing a supplement is 8 weeks after it has been determined that a return is incorrect or incomplete. If you do not file the suppletion on time, the Tax Authorities can impose a penalty which can result in a fine of 100%. Previously, the deadline was "as soon as possible," but this rule has since been dropped. So be sure to report errors immediately upon discovery.
- If you need to file a supplement for the year 2025, we advise you to file this supplement as soon as possible, but no later than April 1, 2026, to avoid tax interest. Does the VAT amount to be corrected amount to €1,000 or less? Then the correction may be processed in the next VAT return and no separate suppletion needs to be filed.
- As of May 1, 2026, the tax authorities' account number will change. This means that any VAT due must also be transferred to a different account number from that date. The Tax and Customs Administration will announce more about the account number change in mid-January 2026.
Finally
The last VAT return of the year differs from the VAT returns for previous periods. It is therefore important to prepare a careful and accurate final 2025 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.
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