The Dutch tax retention obligation explained for digital records

Almost every company keeps its records digitally these days. Invoices arrive as PDFs, contracts are signed online and bank statements sit in a folder on a server or in the cloud. That is convenient, but it does not change the statutory retention obligation. It still applies in full, and a digital folder is easier to lose than a filing cabinet.

This post explains what the Dutch retention obligation (the fiscale bewaarplicht) means, what falls under it and how to handle it in practice. It is not legal advice. Always check your own situation with your accountant or tax adviser.

How long you have to keep records

The basic rule is seven years. It appears in two places in Dutch law:

• article 52(4) of the General State Taxes Act (Algemene wet inzake rijksbelastingen, AWR), for the tax authorities;
• article 2:10(3) of the Dutch Civil Code, for legal entities such as a bv.

Data about real estate has a longer period. Under article 34a of the Turnover Tax Act 1968 you keep it for nine years after the year in which the property was first used. This covers, for example, buying, renovating or letting a business premises, because the VAT on it can still be adjusted years later.

What counts as records

Your records are more than the bookkeeping itself. They include every document that shows your rights and obligations and supports your tax returns, such as:

• sales and purchase invoices;
• bank statements and cash records;
• contracts, quotes and order confirmations;
• payroll records;
• emails that belong to the records, such as an email that confirms a price or an order.

That last one is often forgotten. An agreement that exists only in someone’s mailbox is still part of your records.

Digital storage is allowed

You may keep your records digitally, even if the original arrived on paper. The condition is that the data stays complete, readable and unchanged for the whole period. You also need to be able to produce it within a reasonable time during an audit. A scan or PDF in a folder that anyone can overwrite or delete is therefore weaker than it looks.

Where it goes wrong in practice

The law is rarely the problem. Things usually go wrong on an ordinary Tuesday:

• someone tidies up a folder and accidentally deletes the invoices from four years ago;
• a laptop dies, and it held the only copy of the contracts;
• an old cloud account is cancelled because nobody used it any more, and the files go with it;
• a former employee’s mailbox is removed, along with the agreements made with clients.

In each case the storage itself was fine, but agreements and protection were missing. Where the server is located makes little difference here; we wrote about that earlier in a European server is not enough.

A practical checklist

1. One place. Keep the records in one agreed place, not spread across laptops, mailboxes and stray accounts.
2. A retention period per folder. Record for each folder how long its contents must be kept: seven years for ordinary records, nine years for documents about real estate.
3. Protection against deletion. Make sure documents cannot disappear for good within the period when someone clicks delete.
4. A way to show what you kept. Keep track of which documents exist and since when, so you can show your accountant or the tax authorities.
5. Export before you switch. Retrieve and check everything before you cancel a supplier or an employee leaves.

You can cover many of these points with clear agreements and a good backup. Software mainly helps to stop a mistake from having consequences.

How Binadit Drive helps

In Binadit Drive you can turn on document management per team folder. You then set a retention period of 1 to 30 years. Files can still be deleted within that period, but they are only removed permanently once the period has ended, after you confirm them in a list. A legal hold freezes a folder, a file or a whole team folder, with a reason recorded. And you can create a signed retention report that your accountant can verify. If you are coming from SharePoint, see our page on an alternative to SharePoint.

This helps with the retention obligation, but it does not take it over. If you cancel your subscription, everything is deleted, including files under a retention period. The obligation stays with your company, so always export your records before you cancel. And ask your accountant which periods apply to your business.