How does the year-end close work?
A period lock per VAT period does one thing very well: it prevents an entry in an already filed period from still changing. That is the heaviest evidential requirement, and such a lock covers it. What a period lock does not do is fix the year itself, because the items not tied to VAT fall outside it, such as depreciation, accruals and deferrals, and the carried-over balances.
Of the five parts, the closing balance sheet is the most important, and the reason is the knock-on effect. This year’s closing balance sheet is next year’s opening balance sheet. If it is not fixed as a snapshot, a change in year one can silently carry through into year two, and you only notice when two years no longer connect. For a sole proprietorship (eenmanszaak) the net worth comparison (vermogensvergelijking) is the strongest check there is, and a comparison without opening equity is not a comparison.
The parts that carry over across years are the silent trap. A self-employed deduction you could not use in a loss year, a loss that still has to be offset and the counter for the starter’s deduction: those three live per year of origin and not as a balance. If you do not record them per year, you can later no longer show where a balance comes from.
Where is the year-end close in the law?
For this term there is no statutory basis to refer to, and that is not an omission but the state of affairs. It is a term from bookkeeping practice, not a legal obligation with its own article.
What does apply sits one level higher: under Article 52 of the Dutch General State Taxes Act (Algemene wet inzake rijksbelastingen, AWR), your bookkeeping must be verifiable within a reasonable time. How you set that up is not prescribed by law.
What does basestep do with the year-end close?
Your VAT periods are locked once you have filed them, and that lock only moves forward. As a result a filed quarter no longer changes. What does not exist yet is a year-end close that locks the whole year with a closing balance sheet. Until it exists, the platform nowhere says a year is done, and that is deliberate.
All calculations, explanations and signals in basestep are calculation support and instruction, not tax or legal advice. Amounts are estimates based on your own input; the Dutch tax authority (Belastingdienst) sets the assessment.
Where does it go wrong with the year-end close?
The two mistakes you run into most often in practice with this term, and what they cost you.
Calling a year done because the quarters are filed
Filed VAT periods say something about VAT and nothing about your balance sheet. The depreciation, the accruals and deferrals and the carried-over balances are not in those periods.
Not recording the closing balance sheet
Without a snapshot, next year’s opening balance sheet depends on what is in the system today. A correction in the old year then shifts unnoticed into the new one.
Keeping carried-over balances as a single balance
An unused deduction or a loss lives per year of origin. If you only keep the total, you can later no longer show which year supplied which part.
Further reading
Three places this term is tied to, inside this glossary and beyond.