It started with one quarter you skipped. Then a year in which you put off the return. By now several years are outstanding and you no longer dare open the letters from the Tax Administration. It happens to more entrepreneurs than you think, and it can be sorted out. The sooner you start, the less it costs.
How far back can the Tax Administration go?
Further than many people think. VAT that was not paid or underpaid can still be collected by the Tax Administration (Belastingdienst) up to 5 years after the end of the calendar year in which it became due. For income tax, the Tax Administration has 3 years after the end of the tax year to issue an assessment, extended by the length of any extension. If that turns out to be too low, an additional assessment can, under certain conditions, follow up to 5 years after the end of the year. Waiting until it is ‘time-barred’ is therefore not a plan.
For you, the retention obligation applies: you must keep your records for 7 years.
What you may face
If you don’t file, the Tax Administration can estimate your income and your VAT. That estimate is often higher than your real figures. On top of that come penalties and interest. For a late VAT return, the penalty has been €82 per return since 2025. For paying late it is 3% of the amount, at least €50. For income tax, the penalty for failure to file is €469 as standard. With systematic default, the penalties can be higher.
There is something else. If you haven’t filed a return, it is up to you to prove that an estimated assessment is too high, not up to the Tax Administration to prove it is right. You can read more in An assessment based on an estimate: what now?.
Step 1: list what is outstanding
Don’t start with bookkeeping, start with an overview. Which VAT returns and income tax returns are still outstanding? Which assessments and penalties have already been imposed, and which objection periods are still running? An objection must arrive within 6 weeks of the date on the assessment. So an assessment you have just received takes priority.
Step 2: start with VAT
VAT returns generally cannot be extended. For income tax that is often possible, if you request it in time. So clear the outstanding VAT quarters first. Also read Late VAT return: the penalty and what to do now and Requesting an extension for your tax return.
Step 3: reconstruct your bookkeeping
You no longer have all your receipts? That is usually not insurmountable. Your bank statements are the basis: they show every payment that came in and every payment you made. Missing sales invoices can be drawn up again, and purchase invoices can often still be requested from your suppliers. Where something is genuinely missing, you need to make a well-founded choice about how to process it.
Step 4: report it yourself, before the Tax Administration finds out
If you declared too little in earlier returns, it makes a big difference if you report it yourself. If you do so of your own accord, clearly and before you know or should suspect that the Tax Administration is onto it, a heavy penalty is generally avoided. For VAT, you do this with a supplementary return (suppletie). You do still pay the tax and the interest. Once an audit has been announced, it is too late.
Step 5: make sure it doesn’t pile up again
Once the backlog is gone, make sure you stay on top of it. Link your bank, submit your receipts straight away and have your returns done at fixed times. If you can’t pay the amounts that come up now in one go, apply for a payment arrangement. That is possible for in principle no more than 12 months.
Help with a backlog
Catching up on a backlog takes a fixed order and the nerve to open the envelope. You don’t have to do that alone. On our page about a bookkeeping backlog you can read how we catch up on outstanding years and keep your books up to date afterwards. What catching up costs, you hear upfront in a free introductory call.