We are using QuickBooks Online for our Netherlands entity. How can we set up the 'reverse charge' mechanism for Dutch VAT in QBO?

We've got some troubleshooting steps to set up the Dutch reverse charge for VAT in QuickBooks Online (QBO). This requires a few key steps to ensure that both the input and output VAT is recorded correctly without impacting the net VAT payable, mariel-gaces.

To handle reverse charges, you need to create both an input VAT code (for the VAT you would have paid) and an output VAT code (for the VAT you need to declare). Here's how to create custom VAT codes:

1. Go to Taxes and select Edit VAT in the top right corner.
2. Click on Add tax.
3. Create a custom tax code for input VAT. Name it such that you can recognize it easily, e.g., "Input VAT (Reverse Charge)". Set the rate to 21% or the standard applicable rate.
4. Create another custom tax code for output VAT, and name it appropriately, e.g., "Output VAT (Reverse Charge)". Set this rate to the same rate as the input VAT.

For more detailed information, you can refer to this article: How do I set up sales GST/VAT rates and use them on forms? (International QBO). When recording an invoice from a non-EU supplier with reverse chargeable services, follow these steps:

1. Go to + New and choose Bill (or Expense if you're recording an expense).
2. Select the supplier name from whom the services were received.
3. Under the item or service line:
   • Choose the appropriate expense account (e.g., services expense).
   • Enter the amount excluding VAT.
4. Choose the Output VAT Code you created.
5. Add a line for the matching Input VAT. This should be the same amount as the output VAT but select the Input VAT Code.

Once done, run the VAT report to ensure that both the input and output VAT are recorded properly. Here's how:

1. Go to the Reports tab.
2. From the search field, enter VAT Liability Report.
3. Check that the net VAT payable amount reflects only the actual VAT due from other transactions.

For VAT returns, QuickBooks will consider both VAT entries as deductions and inclusions, maintaining accurate figures for your filings. Always review the numbers in the VAT report before submission to make sure everything aligns.

In addition, you can refer to this article to learn how to file your sales tax return in QBO: File your sales tax return and record sales tax payments in QBO.

The Community always has your back if you have any other questions about managing your VAT or any QuickBooks-related concerns. This thread is also open for handling your bank and financial entries, mariel-gaces.