Keeping records as a self-employed professional: what are you legally required to keep?

As a self-employed professional, you're legally required to keep records that the Tax Authority can audit. Exactly which documents this involves and how long you must keep them isn't always clear in practice. Here's the overview.

What falls under your records?

The basic records of a self-employed professional include, among other things:

• Sent and received invoices (both sales and purchases)
• Bank statements from your business (and, where relevant, personal) account, as far as business-related
• Contracts and agreements with customers and suppliers
• Receipts and proofs of purchase for business expenses
• Time records, particularly relevant for the hours criterion for the self-employed tax deduction
• Mileage records when using a (personal) car for business trips
• Payroll records, if you employ staff
• Correspondence relevant to your tax position

How long does the record-keeping obligation apply?

The general statutory record-keeping obligation is 7 years. This applies to the vast majority of your records: invoices, bank statements, contracts and other supporting documents.

There's one important exception: records relating to real estate (such as business premises) must be kept for 10 years, in connection with the VAT revision period for capital goods.

May you keep your records digitally?

Yes, digital record-keeping is allowed, and in practice it's also the most practical approach for most self-employed professionals. The Tax Authority does set a number of requirements here:

• The data must be able to be made readable and verifiable within a reasonable time, even after years
• The content of the document may not change after storage (think of a finalised PDF rather than an editable Word file)
• You must be able to hand over the data to the Tax Authority within a reasonable time upon request

If you scan your paper receipts and keep your invoices digitally in accounting software, you generally meet these requirements — a paper copy is no longer needed afterwards.

Regularly back up your digital records to a different location than where the original is stored. In the event of data loss due to a technical fault, the Tax Authority doesn't accept "it's lost" as a valid excuse.

What happens during an audit?

During a Tax Authority audit, you must be able to provide your records within a reasonable time, complete and organised. If documents are missing, the inspector can estimate your profit based on a so-called "reversal of the burden of proof" — in practice usually less favourable to you than the actual situation. Tidy, complete records are therefore also in your own interest.

Consequences of incomplete records

Besides an estimated (often higher) tax assessment, incomplete or unverifiable records can lead to a fine. In cases of repeated or gross negligence, this can even have far-reaching consequences. Well-maintained records from day one prevent this risk entirely.

FactuurMakenOnline automatically stores all your sent invoices, credit notes and attachments in one central, organised place — including easy exporting for your accountant or during an audit.