What is VAT code? Meaning and explanation

A VAT code indicates per entry line how VAT should be treated. In the Netherlands this includes the standard rate of 21%, the reduced rate of 9%, the zero rate, reverse-charge VAT, exempt supplies and supplies within and outside the EU. The VAT code determines the VAT amount and the box of the VAT return in which the amount is included.

For a firm, the VAT code is one of the most error-prone fields in booking. A wrong code leads to an incorrect VAT return, with the risk of corrections, additional assessments or penalties. Especially with international invoices, reverse charge and clients with exempt activities, the right code is not always obvious and staff need to pay close attention.

Autoboeker synchronises the VAT codes from Exact Online, Twinfield, SnelStart and e-Boekhouden and proposes a VAT code per line based on history. It recognises 21%, 9%, 0% and reverse-charge VAT, detects within and outside the EU and checks for missing VAT, a deviating VAT code and a deviating VAT amount. In the invoicing module, the firm links the allowed VAT codes to GL accounts.