Business records

The bookkeeping is your financial accounting, in which you keep track of your income and expenditure. Retaining incoming invoices and (copies of) outgoing invoices is part of your bookkeeping. You should also keep receipts (also if you scan them), because a tax investigator must be able to check they are genuine. In addition, you should keep your bank and giro statements or ensure that internet banking remains accessible during the retention obligation of seven years.

Accounting software
You can set up and maintain your bookkeeping in Excel or use accounting software. This bookkeeping is the basis for your income tax and turnover tax returns.

Separate account?
It is not obligatory to open a separate business bank account for your sole proprietorship, but it is recommended. In this way, it is easier to separate private and business expenditure. That is easier for your accounting and in the event of an inspection, it is also simpler for the Dutch Tax and Customs Administration. The costs of a bank account for your sole proprietorship are professional expenses and are therefore deductible.

Contracts
Retain contracts, assignment/commission confirmations, general terms and conditions and other important agreements with clients/customers.

Correspondence
Retain important correspondence, such as confirmations of agreements that you have made with a client, offers from third parties and/or correspondence about deadlines. In short, all matters that you may need at a later date. You should also retain your own correspondence.

Insurance policies 
Retain policies and confirmations of business insurance policies taken out. Common business insurance policies include: business legal insurance policies, business liability insurance policies and invalidity insurance policies.

In the event of an inspection, the Dutch Tax and Customs Administration may request diaries and appointment books. You should therefore keep time-tracking records which show how many hours you and, where applicable, your partner for tax purposes, spend on the business. You should also consider the time that you spend on accounting, promotion, research and your travel time.

Time recording matters if you want to fulfil the hours criterion, as some deductible items for self-employed professionals are dependent on the number of hours that you spend on your business.

You have a retention period of seven years for your business records. During this period, the Dutch Tax and Customs Administration may check your accounting records.