Does a sole trader (eenmanszaak) have to file accounts?

As a sole trader — and incidentally also as a VOF — you do not have to file annual accounts with KVK. The filing obligation in Title 9 of Book 2 of the Dutch Civil Code applies to legal persons, such as a BV or an NV. A sole trader is not a legal person.

What you do have to do

You are subject to a record-keeping obligation: you must keep records from which your assets and your result can be derived at any time. As a rule you keep those records for seven years. For your income tax return you have to substantiate the profit from business; a balance sheet and a profit and loss account are the most usual form for that.

• •Records that show assets, debts and result.
• •A seven-year retention obligation for your records and the annual documents.
• •A substantiation of the profit with your income tax return.

Why prepare annual accounts anyway?

First because your figures are then correct: anyone who keeps only a cash book does not see whether their business assets are growing or shrinking. Second because others ask for them. A bank for financing, a leasing company, a mortgage lender or a buyer when you sell your business does not want loose spreadsheets but a coherent overview.

What about the tax return?

The balance sheet and profit and loss account are the two statements you need for that.

In your income tax return you enter the profit from business. Your annual accounts are the substantiation of that: the same figures, but with notes. Bear in mind that not everything in the annual accounts works the same way for tax: the entrepreneur's allowance (ondernemersaftrek) and certain tax schemes belong in the return and not in the annual accounts. Conversely, tax and commercial depreciation may differ from each other.

How it differs from a BV

How to approach it

You can also prepare the figures yourself with the wizard, in which the opening balance from the previous financial year is carried over.

Start with your opening position: the business equity at the start of the financial year. Then enter your assets and debts, determine the result through the profit and loss account and record which accounting policies you have used. You can read more about that in annual accounts for a sole trader and in EV begin and EV end.