Recently we have been asking you for your VAT number (VAT number), including your home address. We get a lot of questions about this. We get that. In this article we explain the situation to you through 7 questions. Before you continue: if you do not have a VAT number or are not established as an entrepreneur in the Netherlands, you can skip the blog below. Because nothing changes for you. This only affects Dutch entrepreneurs with VAT numbers
- Why don't other platforms require this
We are located in the Netherlands. This means that we are dealing with Dutch tax legislation. It states - simply put - that if you reside in the Netherlands, you are an entrepreneur when you earn money with work, without being employed for this. Depending on the criteria, you must register with the Dutch Chamber of Commerce or the Dutch Tax Authorities.
Other platforms that are located in other countries have different rules. - Why are you only asking this now?
A very well-known other fan engagement platform recently filed a lawsuit in the European Court, precisely because of the VAT tax rules. The Member States in the European Union have eagerly awaited this lawsuit, as have all platforms worldwide (for example also resale platforms such as Ebay). The ruling could have enormous consequences for the way in which platforms deal with VAT. If you find it interesting, you can read exactly what this is about here.
The predicted outcome is that, for the fiscal (and therefore not the legal) side of a platform, one must reckon with the idea that a platform purchases content from a Creator and then sells it itself to a consumer. - What does this mean?
The above means that the Tax Authorities believe that you as a Creator should send us an invoice every month. That is of course very cumbersome. That is why we solve this for you by having us draw up the invoice on your behalf. We call that self-billing.
If we receive a VAT number and address from you, you will receive a monthly VAT invoice from us. This will write out exactly how much you have sold on our platform, how much the commission is and how much you have earned. In fact, nothing changes compared to the current overviews that we already give you.
So what's different?
If you are a Creator registered in the Netherlands, we only apply a VAT calculation to the net turnover (so after deduction of the commission) that you have earned on F2F in a month. After all, according to the tax authorities, we buy from you (so what you have earned net is equal to what we buy from you).
So suppose your subscription costs 10 euros per month and you have 10 fans, then you have earned 100 euros on our platform. Our commission is 18%. That means that of the 100 euros from us, you will receive 82 euros into your bank account.
We have to transfer VAT to you on the 82 euros. That is not deducted from the 82 euros, but is extra transferred to you. We will do that monthly on the 10th. 21% VAT on 82 euros is 17.22 euros. So, in addition to your net earnings, you will receive a separate transfer to your bank account every month. - So Dutch Creators with a VAT number earn 21% more?
No, unfortunately that's not how it works. Yes, we transfer 21% dutch VAT to your bank account. After all, you get both your net earnings (in the example 82 euros) and the VAT (17.22). But that 17.22 is not yours. You can't spend that money. You are obliged to file a tax return with dutch the tax authorities. You state the net earnings on F2F at 1a in your dutch tax return. Your accountant can help you with this. The dutch tax authorities then calculate that, if you have earned 82 euros (sold to us) on our platform, you must pay 17.22 VAT to the dutch tax authorities.
We have then deposited that money into your account and you must use it to pay the dutch tax authorities. Make sure you do this really, really well. Unfortunately, the tax authorities are not known for their enormous patience. So if you spend this money on other things, you could get into trouble. - Do you also do this retroactively?
Yes and no. We look once at the end of October at all previous months. So, if you enter your VAT number this month, we will do this retroactively for all months until January 24th (when we started our platform). We will then process your VAT number in the month that you enter it. We cannot correct the months in which you have not provided a VAT number with retroactive effect from that moment on. It is therefore important that you immediately pass on your VAT number to us as soon as you have it. - I don't have a VAT number?
The Tax Authorities can state that because you earn money by creating and posting content, you are active as an entrepreneur and are therefore obliged to register as an entrepreneur with the Tax Authorities and/or with the Chamber of Commerce. Registering as an entrepreneur also has advantages: depending on certain criteria, you receive tax benefits and you can deduct VAT on purchases that you make for business, such as a new telephone to film new content and collabs. We therefore advise you to look for a good accountant to assist you with this. - I find this really very difficult and it is not that difficult on other platforms.
We understand that you find this very complex matter. We think so too. However, it is not the case that this is not so difficult with other platforms. It is possible that other platforms do not do this properly, in accordance with the rules. Because we are located in the Netherlands and so are you as a Creator, we as a Dutch buyer (we) and seller (you) must of course follow the rules carefully. We wish this was different. If you let your accountant read this blog and the invoices you receive from us, it will immediately become clear to them how it works. If you do not have an accountant and you find this very complicated, we advise you to hire an accountant.
Hopefully our above explanation provides you with some clarity on this topic. If not, you can always send us a message. We are happy to help you!
