A new tax measure, which will come into effect on 1st January 2017, will change the way that bad debt relief works in the Netherlands.
Previously, VAT declared on bad debts could only be reclaimed once you had proof that there was complete certainty that the debt would not be paid. Once this was obtained the VAT could be claimed back from the tax office via your next VAT return.
From 1st January 2017 it will be possible for bad debt relief to be reclaimed if it has been outstanding for one year – the need to have certainty that it will not be paid will no longer be required. However, the timing of the reclaim is very strict as it must be done on the first available VAT return after one year. If you are late to make the claim, then formally the VAT cannot be reclaimed on the VAT return and a different process will need to be followed.