What is TAMS scheme for Travel Agents?

If you’re an entrepreneur in the travel industry, you may have heard of the Travel Agents’ Margin Scheme (TAMS). This article will explain whether this VAT scheme applies to your activities.

According to the Dutch Tax and Customs Administration, any entrepreneur who sells holidays or trips under their own name is considered a travel agency. Even if you don’t register as a travel agency with the Chamber of Commerce, you may still be subject to the TAMS if you sell all-in trips as a tour operator. However, if you’re a broker or a travel agent who receives brokerage fees, you’ll usually act on behalf of another travel agency and won’t be eligible for the TAMS.

If you add goods or services to a purchased trip, this may be considered “added value,” and normal VAT rules will apply to the added portion. You can find the Dutch Tax and Customs Administration’s definition of added value.

If you sell trips to destinations outside of the EU, you’ll be subject to a 0% VAT rate on the profit margin. However, if the trip takes place partially within the EU and partially outside the EU (e.g., during a transfer), you’ll apply a 21% VAT rate on the portion that takes place within the EU and a 0% VAT rate on the portion that takes place outside the EU. This also applies if there is a stopover where travellers can leave the aircraft. If travellers are unable to leave the plane, you’ll apply a 0% VAT rate to the entire trip.

For example:

if you sell a direct trip from the Netherlands to Asia, you’ll apply a 0% VAT rate to your profit margin. If you sell a trip from the Netherlands to Asia with a transfer in France, you’ll charge a 21% VAT rate on the portion between the Netherlands and France and a 0% VAT rate on the portion from France to Asia. If you sell a direct trip from the Netherlands to Asia with a stopover in France where passengers can board but can’t leave the plane, you’ll apply a 0% VAT rate to the entire trip.

As you can see, the TAMS can be complicated. If you’re unsure about your situation, consult Chater Finance Tax Agent. Send us an email on info@chaterfinance.nl

Benefits for starting entrepreneurs

When you’re just starting out as an entrepreneur, you will probably have a lot on your mind. Setting up a business and finding customers or clients takes a lot of time and energy. And in addition, you also have to deal with all kinds of financial matters! Fortunately, there are a number of tax benefits you might be entitled to in the first years of your entrepreneurship.

Declaring start-up costs

It’s possible to include business costs you’ve made before the actual start of your company in your administration afterwards. These are the so-called start-up costs. This includes all the expenses you’ve made to start your business and includes costs for marketing, advice and your registration with the Dutch Chamber of Commerce (KvK). If you’ve bought equipment such as a laptop or an expensive camera as a private individual with the intention of using it for business purposes later, you’re allowed to put it in your company’s accounts. You’re selling it to your company so to say. Of course, the most important condition for stating these costs is that you still have all the receipts and invoices.

Using tax relief for new companies

As a starting entrepreneur, you’re entitled to a tax relief for new companies three times in the first five years of your business. The tax relief for new companies complements the private business ownership allowance for which the criterion is working at least 1225 hours per year for your company. This extra deductible item on your tax return reduces your profit, meaning you have to pay less tax. You can’t choose the years for which you want to use the tax relief for new companies yourself. When applying for the private business ownership allowance for any particular year, while also being entitled to a tax relief for new companies, you must make use of it. Are you also in paid employment, in addition to running your own business? Should the application of the tax relief for new companies result in a negative profit and cause a loss, this will automatically reduce your income. This can mean that you’ll get part of the income tax back that’s been withheld during the year.

Random depreciation

All business expenses over €450 are considered an investment. As a general rule, all business investments must be depreciated over the course of, at least, five years. This means that each year you can declare a maximum of 20% of the purchase price as expenses. However, investments made in the years that you’re entitled to the tax relief for new companies, OR the year before that, you’re allowed to choose how and when you depreciate business assets. This method can significantly reduce your profit in the first years, resulting in paying less income tax.

Small businesses scheme (KOR)

Even though this exemption is not exclusively for new business owners, it can provide you with some administrative advantages. When registering for KOR, you get a VAT exemption and you no longer have to file VAT returns. If you’re still in the start-up phase with little turnover, it might be interesting to see if this regulation is suitable for your company. If you have any questions about this, you can always contact your accountant!

The maximum transfer amount has been increased

Whether it’s a monthly contribution to an environment-friendly climate fund, a yearly gift to a gallery or funding brand-new t-shirts for a local football club; you will possibly have made a contribution at some point in your career as an entrepreneur. And also while it’s plainly extremely honorable to give away to a great reason, it likewise holds some tax obligation benefits! In this write-up, we’ll describe which contributions are deductible and also can be made on behalf of your business.
As an entrepreneur, it’s feasible to make a company contribution; to advertise your brand awareness for example. Additionally, you can likewise make a contribution to a great cause without entrepreneurial objectives, certainly. Each scenario has various repercussions for your monetary administration.

Giving away as a single proprietor
Possibly you’re thinking about making a donation to a charity or club in behalf of your single proprietorship. In order to be enabled to deduct the expenses of the contribution from your revenue, the contribution requires to contribute to your company. This is the case if, for example, you pay money for an advertising board on the side-line of a sporting activities club. Or if you sponsor a public occasion that can boost your image. So if the donation is plainly beneficial to your business, you’re allowed to submit it as an overhead. This is not the case with routine contributions to an environment fund, as an example. But as an exclusive individual, you are allowed to declare these gifts as a deductible item for income tax obligation.

Donating as a private person
As a personal person, you can contribute to any charity you such as, without it having to be useful. When stating these presents for income tax, the amount will certainly be deducted from your complete income in box 1. Your total revenue is put through the different tax obligation brackets, resulting in a specific quantity you end up paying. So your contribution isn’t straight deducted from the final amount, however does influence the overall earnings with which the taxes are determined.

When are my donations insurance deductible?
However, to be enabled to subtract donations there are particular problems you have to think about. Contributions in money are not deductible, for instance. And also the donation requires to be made to among the list below types of establishments:

An organisation with a (cultural) ANBI standing
A club
A social rate of interest organisation (SSBI).

You can utilize this search engine of the Dutch Tax and Customs Management to find out whether an organization has an ANBI status. If the organisation has a cultural ANBI condition, you can even increase your donation by 25%, which is additional valuable of course!

When are my contributions deductible?
The quantity you’re allowed to subtract after having made a contribution to among the three sorts of institutions mentioned above, depends upon whether the contribution is a periodic gift or an ordinary (one-off) gift.

Periodic donation or normal donation.
A periodic contribution can be totally subtracted in your tax return. However signing up regular donations appropriately does require some additional work. You require a composed authorization of the reality that the charity is allowed to periodically debit the donation. You will certainly receive a transaction number when you authorize the arrangement with the charity, which need to be gone into when submitting your income tax return. The Dutch Tax and also Traditions Administration can request this agreement for assessment. It’s consequently vital to keep the arrangement safely. The contribution contract also requires to be valid for a minimum of 5 years and also have to mention an end date. Please note that for contributions to a club, this is the only method to make donation, as average contributions to clubs aren’t deductible.

A regular donation may just be consisted of as an insurance deductible item if the total amount of your donations goes beyond the threshold quantity. This threshold is set at 1% of the total revenue of that year. This makes it difficult to estimate the threshold quantity during the year. You’re enabled to subtract the share of donations that surpass the limit. It’s therefore possible that your donations are not deductible whatsoever or partially. In addition to not being able to subtract an average contribution unless you pass the threshold quantity, contributions are also restricted to 10% of your income.

? Can charitable donations be tax deductible

Whether it’s a monthly contribution to an environment-friendly climate fund, a yearly gift to a gallery or funding brand-new t shirts for a local football club; you will possibly have made a contribution at some point in your career as an entrepreneur. And also while it’s plainly extremely honorable to give away to a great reason, it likewise holds some tax obligation benefits! In this write-up, we’ll describe which contributions are deductible and also can be made on behalf of your business.
As an entrepreneur, it’s feasible to make a company contribution; to advertise your brand awareness for example. Additionally, you can likewise make a contribution to a great cause without entrepreneurial objectives, certainly. Each scenario has various repercussions for your monetary administration.

Giving away as a single proprietor
Possibly you’re thinking about making a donation to a charity or club in behalf of your single proprietorship. In order to be enabled to deduct the expenses of the contribution from your revenue, the contribution requires to contribute to your company. This is the case if, for example, you pay money for an advertising board on the side-line of a sporting activities club. Or if you sponsor a public occasion that can boost your image. So if the donation is plainly beneficial to your business, you’re allowed to submit it as an overhead. This is not the case with routine contributions to an environment fund, as an example. But as an exclusive individual, you are allowed to declare these gifts as a deductible item for income tax obligation.

Donating as a private person
As a personal person, you can contribute to any charity you such as, without it having to be useful. When stating these presents for income tax, the amount will certainly be deducted from your complete income in box 1. Your total revenue is put through the different tax obligation brackets, resulting in a specific quantity you end up paying. So your contribution isn’t straight deducted from the final amount, however does influence the overall earnings with which the taxes are determined.

When are my donations insurance deductible?
However, to be enabled to subtract donations there are particular problems you have to think about. Contributions in money are not deductible, for instance. And also the donation requires to be made to among the list below types of establishments:

An organisation with a (cultural) ANBI standing
A club
A social rate of interest organisation (SSBI).

You can utilize this search engine of the Dutch Tax and Customs Management to find out whether an organization has an ANBI status. If the organisation has a cultural ANBI condition, you can even increase your donation by 25%, which is additional valuable of course!

When are my contributions deductible?
The quantity you’re allowed to subtract after having made a contribution to among the three sorts of institutions mentioned above, depends upon whether the contribution is a periodic gift or an ordinary (one-off) gift.

Periodic donation or normal donation.
A periodic contribution can be totally subtracted in your tax return. However signing up regular donations appropriately does require some additional work. You require a composed authorization of the reality that the charity is allowed to periodically debit the donation. You will certainly receive a transaction number when you authorize the arrangement with the charity, which need to be gone into when submitting your income tax return. The Dutch Tax and also Traditions Administration can request this agreement for assessment. It’s consequently vital to keep the arrangement safely. The contribution contract also requires to be valid for a minimum of 5 years and also have to mention an end date. Please note that for contributions to a club, this is the only method to make donation, as average contributions to clubs aren’t deductible.

A regular donation may just be consisted of as an insurance deductible item if the total amount of your donations goes beyond the threshold quantity. This threshold is set at 1% of the total revenue of that year. This makes it difficult to estimate the threshold quantity during the year. You’re enabled to subtract the share of donations that surpass the limit. It’s therefore possible that your donations are not deductible whatsoever or partially. In addition to not being able to subtract an average contribution unless you pass the threshold quantity, contributions are also restricted to 10% of your income.

In the eyes of the Netherlands Tax Administration, an entrepreneur

An entrepreneur in the eyes of the Netherlands Taxation

It may sound slightly weird, but not every entrepreneur has to declare his or her profits to the Dutch Tax. You can have a Chamber of Commerce registration, pay VAT every quarter, and still only submit a private income tax return at the end of the year. And the opposite is also perfectly possible: you earn money with your hobby, and you’re now wondering if you’re officially an entrepreneur or not. So how can you determine if you’re an entrepreneur in the eyes of the Dutch Tax and Customs Administration?

Before you can determine whether you are an entrepreneur in the eyes of the tax authorities, it’s important to first determine whether you have a business. The Dutch Chamber of Commerce (KVK) has three criteria with which it defines a business:
– you provide a service or product
– you charge a commercial rate
– you do business with more people than just friends or family.
Have you answered all the above three questions with a ‘yes’? then, you’re a business owner!

Turnover tax and income tax
If you meet the criteria the KVK uses to define a business, this doesn’t automatically mean that you’re an entrepreneur in the eyes of the Dutch Tax and Customs Administration. That’s because there are two types of taxes – turnover tax and income tax – both of which have different criteria for an entrepreneurship.

Criteria turnover tax
You’re obliged to file a VAT return if you’re self-employed and you earn money from your business on a regular basis. Whether you meet these criteria is determined when you register with the KVK. If you’re not registered there, but you do meet the turnover tax criteria, you’re still obliged to request a VAT number.

Criteria income tax
Things are different in regard to the income tax, which is filed at the beginning of each new year. In this case, the Dutch Tax and Customs Administration checks on a case-by-case basis whether you’re to be assessed as an entrepreneur. So this is everything but a foregone conclusion.

The tax authorities will use the following criteria:
1. Continuity – you strive to continue doing business, for example by attracting new customers or by saving money for future activities.
2. Business risk – you bear the risk for any possible financial losses, such as non-paying customers or investments that don’t turn out well.
3. Size of business – you work for at least three different customers a year, and over the past three years your profits were larger than your losses.
4. Independence – you’re free to arrange your work the way you want to and to determine your own rates.
You might have noticed that the criteria are not always clearly defined. This means that you, as an entrepreneur, must proactively determine your position.

You can use the Check for Entrepreneurs (OndernemersCheck, in Dutch) of the Dutch Tax and Customs Administration for this. Please note that the Tax Authorities can always rule differently once they’ve received your tax return, and that you may be obliged to file either a profit return or a private tax return.

Making a profit or other income declaration

For income tax purposes, the entrepreneur allowance is the most important benefit. In addition to several deductions and allowances, the private business ownership allowance is the most commonly used. To qualify, you must work 1,225 hours. Three to four days a week, you work for your business. You will save € 6,310 on your taxable profit in 2022 when the private business ownership allowance is applied. Additionally, as an entrepreneur, you qualify for the SME profit exemption, which reduces your taxable profit by fourteen percent. Therefore, both schemes can have a significant impact on your tax return!

Taxes are paid on income, not on business expenses, so if you have income, you must report it as ‘Other income’. You can still declare any costs incurred in realizing this income, but you won’t be eligible for entrepreneur allowances or SME profit exemptions.

You can always consult Chaterfinance about your situation, and we will advise.

Tax Intrest

Your income tax return has been submitted and three months later you will of course receive another assessment. All amounts to be paid in this assessment correspond to what is stated on the declaration, except that there may be an additional amount that you cannot enter directly: “tax interest.” So what is tax interest?

Tax intrest:

Tax interest is a fee that you pay to the tax authorities on your debt (the tax owed) that you have to pay when the tax authorities impose an assessment on how much you have to pay. For sole traders, the tax rate for all taxes is currently 4%.

Why are there tax benefits?

The tax you have to pay is considered an interest-bearing debt. By charging a tax benefit, the Tax and Customs Administration receives compensation for this.

When do you pay tax interest?

When the tax authorities impose a tax benefit, depends on the method of taxation. As mentioned, you owe tax after the end of the tax year or tax period. When the interest counter starts working, it varies:

In the case of income tax, the tax interest is calculated from 1 July following the year to which the return relates. If you file your income tax return before 1 May, no tax benefit will be charged.
In the case of turnover tax, direct tax interest will be charged as of 1 January following the financial year. If you pass on an extension or correction before 1 April, you will avoid a tax advantage.
Tax interest will also be charged if you have filed a return on time, but have not paid.

How do you avoid tax benefits?

You must submit the return before the date set by the tax authorities.
Another way to avoid tax benefits is through a temporary assessment. Then you pay the tax during the year by estimating your income. The amount that you paid via your interim assessment is ultimately deducted from the amount that you actually owe in income tax. Depending on how good your estimate is, there will be a small amount to settle and the tax benefit on this is negligible.