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VAT refunded privately

Accounting  — Fri 25 Mar 2022

It may happen that the Belastingdienst will refund an amount to your private account in response to a sales tax return. This will especially be recognizable to sole proprietors. How do you resolve this?

Your bookkeeping will expect the amount back into the business account. So you could proceed as follows:

  • Deposit the exact amount from your private account into your business account.
  • Connect the transaction to the 'Betaalde en/of ontvangen' category.
  • It is convenient to make a short note as a note to the transaction immediately. For example, 'Deposit privately received VAT from second quarter'.

However, it can also be done without transferring the amount again. In that case you book it as a withdrawal by yourself, because it is already in your private account anyway. Suppose it is € 100.00, you would do it as follows:

  • Create a new memorandum booking of the 'Correction' type.
  • Enter a description that is clear to yourself, such as: 'Correction of deposit by Belastingdienst to private account'.
  • As the date, enter a date after the relevant VAT return and refund to your private account, but before the end of the fiscal year.
  • Add a line to the memorandum booking with the category 'Betaalde en/of ontvangen BTW', and put € 100.00 under credit.
  • Add a line to the memorandum booking with the category 'Opnames', and put € 100.00 under debit.

After this, your balance sheet shows that the refundable VAT was received, and also that you made a withdrawal from your business of exactly that amount. With that, everything is nicely in order.