so what really is vat?
Why do we have vat?
VAT stands for "Value Added Tax." It’s like a little extra fee added to stuff people buy. The government uses this fee to pay for things like roads, schools, and healthcare.
If you’re selling something or providing a service, you might need to add VAT to your invoice. Then, you give that VAT money to the tax office. You’re basically the tax office's unpaid intern. Congrats!
Why Should You Care?
When you charge VAT:
The government gets their cut.
You have to fill out a form every 3 months (quarterly).
If you forget or mess up, you might get a fine.
But the good news? You can also get some VAT back on your business expenses.
How VAT Works (Super Simple Edition)
You send a client an invoice for €121 (including 21% VAT)
€100 is yours
€21 is the government’s
You buy software for your work, with €4.20 VAT
At the end of the quarter, you give the tax office: €21 - €4.20 = €16.80
Which VAT Rate Should You Use?
21% — Most services (design, coaching, copywriting)
9% — Special stuff like books or art
0% — Clients outside the EU or EU businesses (with something called "reverse charge")
What If You Make Less Than €20,000?
That’s where the KOR comes in (Kleineondernemersregeling).
If you make under €20,000 per year, you can choose NOT to charge VAT at all. That means:
No more adding VAT to invoices
No more quarterly VAT returns
But also: No more getting VAT refunds on your costs
This is perfect if you’re small and your clients don’t care about VAT. (Hint: most consumers don’t.)
Yeah, the VAT form looks like it was built in 1999. But really, it just asks:
How much you earned with VAT
How much VAT you charged
How much VAT you paid on expenses
What’s the difference?
That’s what you pay (or get back).
Want Someone Else to Handle This?
You're not alone. Most freelancers mess up VAT at least once.
But you don’t have to. I can:
Do your quarterly returns
Make sure you stay compliant
Save you from nasty fines