Reclaiming VAT on an unpaid invoice (bad debt)

You invoice a client for €1,225 including VAT (€1,000 + 21% VAT of €225). You've already handed that VAT over to the Belastingdienst. Then the customer disappears and never pays. The unfair part: you still owe the tax on money you never received. The good news: the law lets you reclaim that VAT as a bad debt (oninbare vordering) after a set period, or sooner if it's obvious the debt is uncollectible.

This guide explains exactly when and how to reclaim VAT on unpaid invoices, what documentation you need, and what happens if your customer pays later.

What is an oninbare vordering?#

An oninbare vordering (bad debt or uncollectible debt) is a commercial debt that remains unpaid for so long, or under such circumstances, that it's clear you won't receive it. The Belastingdienst recognises this hardship: you've charged VAT in good faith, but if the debt is truly bad, you can reclaim that VAT and reduce your tax burden.

The key phrase is "bad debt." This is not about a late payment—it's about a debt that has become genuinely uncollectible.

The one-year rule#

The standard rule for reclaiming VAT on bad debt is straightforward:

After 12 months from the invoice date (or the original due date, depending on your accounting method), you can reclaim the VAT as an oninbare vordering. You don't have to wait the full year if the debt is obviously bad sooner—for example:

• The customer has gone bankrupt or is insolvent
• A court has ruled the debt uncollectible
• The customer has disappeared and repeated collection efforts have failed
• You have a written statement from the customer that they cannot pay

If you can demonstrate the debt is clearly uncollectible before one year has passed, you can apply for early reclaim. This requires evidence: court documents, bankruptcy notices, or a formal written acknowledgement from the debtor.

How to reclaim VAT on bad debt#

When you're ready to reclaim, you'll do it in your quarterly VAT return. Here's the process:

1. Ensure your documentation is solid#

Before you claim, gather:

• The original invoice (copy and proof you sent it)
• All payment reminders or dunning letters (aanmaningen)
• Proof of collection attempts (emails, registered letters, phone logs)
• Bank statements showing the payment was never received
• Any bankruptcy or insolvency documentation
• A statement explaining why the debt is uncollectible

2. Calculate the VAT to reclaim#

If your original invoice was €1,225 including 21% VAT:

• Gross invoice: €1,225
• VAT amount: €225
• Net amount: €1,000

You reclaim the €225 VAT, not the full €1,225. The net €1,000 is a business loss (you can sometimes deduct it separately under business expenses, but that's a different route).

3. Enter the reclaim in your VAT return#

In your next quarterly VAT return (the quarter in which you're claiming the bad debt):

• File your normal return (sales, purchases, normal VAT)
• Add a separate line or section for oninbare vorderingen (most VAT software has a field for this)
• Enter the VAT amount you're reclaiming
• Attach a brief note explaining the bad debt and referencing the invoice

The reclaimed VAT reduces your VAT liability for that quarter. If you owe €5,000 in VAT but reclaim €225 for bad debt, you pay €4,775 instead.

4. Keep records for 7 years#

Retain all evidence of the bad debt (invoices, reminders, proof of collection, correspondence) for 7 years. The Belastingdienst may audit your claim, and you'll need to prove the debt was genuinely uncollectible.

A worked example#

Invoice date: 1 January 2025
Invoice amount: €1,210 (€1,000 + 21% VAT €210)
Due date: 31 January 2025
Payment: Never received

Timeline:

• Jan–May 2025: You send reminders, make collection calls (all unsuccessful)
• June 2025: You receive notice the customer's business has closed
• June 2025: You decide the debt is clearly uncollectible and prepare a reclaim

VAT return for Q2 2025 (April–June):

• You file your quarterly return as normal
• You add the bad debt reclaim: €210
• You attach a note: "Invoice #2025-001 dated 1 Jan, customer ceased business, debt deemed uncollectible, proof attached"
• Your VAT liability for Q2 is reduced by €210

If you owed €3,000 in VAT for Q2, you now owe €2,790.

What happens if they pay later?#

Here's the tricky part: if your customer pays the invoice after you've reclaimed the VAT, you must reverse the reclaim in the quarter you receive the payment.

Example:

You reclaimed €210 in Q2 2025. In Q4 2025, surprisingly, the customer pays the full €1,210.

In your Q4 2025 VAT return:

• You enter the payment as normal sales income (€1,000)
• You reverse the bad debt reclaim by adding back €210 to your VAT liability
• Your net effect for Q4: you now owe that €210 again (which is correct, because the customer did pay and the debt is no longer bad)

This prevents you from claiming the VAT twice and keeping the customer's payment—the system stays honest.

Common mistakes to avoid#

• Claiming bad debt before one year has passed (or without proof of insolvency/clear uncollectibility)
• Claiming more VAT than you originally charged
• Failing to reverse the claim if the customer pays later
• Not keeping evidence for 7 years
• Mixing up the net invoice amount (business loss) with the VAT amount (what you reclaim)

The most common mistake: treating a late payment as a bad debt. A customer who pays three months late is not bad debt—they simply paid late. Only claim bad debt when you're confident the payment will never arrive.

The link to collection efforts#

Bad debt reclaim is tied to your collection efforts. The Belastingdienst expects you to have:

• Sent at least one formal reminder (aanmaning)
• Followed up with additional letters or calls
• Pursued other options like a collection agency or small-claims court

If you never bothered to chase the debt, the tax office may reject your claim and argue you hadn't exhausted your options. You don't have to win in court, but you must show you tried.

Read chasing late payers: reminders, aanmaning and collection for the full escalation process and template language for collection letters.

Relation to correcting your VAT return#

If you're reclaiming a small bad debt, you can fold it into your next quarterly return. For larger claims or if you're reclaiming from an earlier quarter, you may file a formal VAT return correction (suppletie) instead. The process is similar, but a suppletie is more formal and is used when correcting a past return.

See correcting a VAT return mistake for when a suppletie is the right move.

Frequently asked questions#

Bad debt is an unfortunate reality of freelancing, but you're not left bearing the full cost alone. By understanding the oninbare vordering rules, you can recover the VAT you've already paid to the Belastingdienst and reduce the sting of a customer who doesn't pay. The key is documentation: keep records of your invoices, reminders, and collection efforts, and claim the VAT in the right quarter. ZZP Belasting helps you track unpaid invoices and flag them for bad debt reclaim so you never forget to recover the VAT.

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