If you’re running a business in the Netherlands, you probably don’t think about credit notes until you absolutely have to. Maybe a product gets returned, canceled, priced incorrectly, or refunded so the invoice you sent is no longer accurate. Credit notes might seem straightforward, but they affect your value-added tax (VAT) reporting, your cash flow, and the accuracy of your records. Below, we’ll explain when to use credit notes, what to include, and how to manage them as easily as possible.

What’s in this article?

• What is a credit note?
  
• When do you need to issue a credit note?
  
• How do credit notes affect VAT compliance in the Netherlands?
  
• What should a credit note include?
  
• How do you create and manage credit notes efficiently?
  
• How Stripe Invoicing can help
  

What is a credit note?

A credit note, also called a credit invoice or credit memo, is a formal way to fix or cancel part of a previous invoice. It reverses a charge you no longer want to collect (e.g., an overcharge, a refund on a returned item, a cancellation of an undelivered service).

In the Netherlands, once an invoice has been sent, it’s locked in for tax and accounting purposes. If something changes, such as an error or cancellation, you usually need to issue a credit note to document the correction and maintain accurate financial records. The credit note sits alongside the original invoice in your records, with the same format and same structure but in negative amounts. If the invoice billed €1,000 and you need to take back €100, you issue a credit note for -€100. The credit note is linked back to the original invoice by number and date. As with invoices, credit notes must be archived for at least seven years.

When do you need to issue a credit note?

Any time you need to reduce the amount of money a customer owes after you’ve already invoiced them, you need to issue a credit note.

That could be because the price was wrong, something was returned, or the service was canceled. To correct it, you don’t edit or delete an invoice. You issue a credit note. It’s the only way to adjust a finalized invoice without creating accounting problems in the future.

Here are the most common reasons businesses in the Netherlands issue credit notes:

• Pricing or quantity errors: If you overcharged, billed for the wrong amount, forgot a discount, or made another type of error, a credit note corrects this mistake. It shows the updated figure while keeping the original invoice intact.
  
• Returned items: If a customer sends back part of an order, you credit them for that portion. Credit notes document that reversal so your accounts and theirs properly reflect the return.
  
• Damaged or faulty goods: When products arrive broken or unusable and you agree not to charge the customer for them, the credit note shows the deduction.
  
• Canceled orders or services: If a service is canceled or changed after the invoice goes out, you credit the amount that no longer applies.
  
• Partial delivery or incomplete work: If you invoiced for more units or hours than you delivered, a credit note corrects the difference.
  
• Late-stage discounts or negotiated changes: If you agree on a discount after invoicing to resolve a complaint, retain a customer, or fix a mismatch, you document it with a credit note.
  

Issue the credit note as soon as you realize an invoice needs to be reduced. This helps you maintain clean records and accurate VAT returns, while demonstrating transparency to your customers.

How do credit notes affect VAT compliance in the Netherlands?

Once you’ve issued an invoice with VAT, it’s locked into your records. If something changes (e.g., an item gets returned, a service is canceled, a price is corrected), you can’t just adjust your VAT totals in the backend. The Tax Administration (Belastingdienst) expects every change to taxable revenue to be backed by proper documentation. If you lower the amount owed, you need a credit note that shows exactly what changed and why. If you don’t issue a credit note, you can’t adjust VAT.

Here’s how the timing works:

• If the credit note and the original invoice fall in the same VAT period, you report the net difference. The credit cancels out part, or all, of the VAT on the invoice, and both are reflected in the same return.
  
• If they fall in different periods and you’ve already reported and paid VAT on the original invoice, the credit note becomes a correction in your next return. The date on the credit note determines when you adjust. For example, if you invoice in Q2 but credit in Q3, VAT is reclaimed in Q3’s return. The same logic applies to B2B customers: they’ll reduce their input tax in the period when they receive the credit note, not when the original invoice was issued.
  

If there’s no credit note, the Belastingdienst might still treat the original invoice as valid and expect the full VAT payment. You need the paperwork trail to match what’s happening in your returns. As with invoices, credit notes must be stored for at least 7 years (10 for some cross-border transactions). If you ever need to show how and when a charge changed and how that impacted VAT, your credit notes are the evidence.

What should a credit note include?

A credit note is a legal financial document. It should include who issued it, to whom, for what, how much, and when. If someone outside your business read it, they should be able to understand exactly what changed and why.

Here’s what that involves in practice:

• Clear labeling: It should say “Credit Note” (Creditfactuur in Dutch) at the top. That distinction is important for your records and your customer’s records.
  
• Issue date: This is the day you issue the credit note. This date determines which VAT period it falls into.
  
• Unique credit note number: As with invoices, credit notes need sequential numbering. This can be the same sequence you use for your invoices or a separate one, but be careful not to skip or duplicate numbers.
  
• Reference to the original invoice: Always include the original invoice number (and date) the credit note relates to. This will simplify reconciliation and audits.
  
• Your business details: Include your company name, address, Chamber of Commerce (KVK) number, and VAT number, if you have one.
  
• Customer details: Include the name and address of the customer, as you would on an invoice.
  
• Description of goods or services: List what’s being credited. Keep it short but specific.
  
• Quantities and prices: Show the credited items or services with negative values. If they were billed at €100 and are being fully refunded, they appear here as -€100.
  
• Subtotal, VAT, and total: Include the VAT rate, the VAT amount being reversed, and the total amount credited (all negative).
  
• Reason for credit: Add a short explanation, such as “Returned item” or “Price correction.” This makes the document easier to follow, especially for audits or future reference.
  

How do you create and manage credit notes efficiently?

With the right setup, creating a credit note is just another part of your invoicing workflow. Here are some tips to keep things running smoothly.

Issue credit notes as soon as possible

Delaying a credit note creates a mismatch between what’s really happening in your business and what’s reflected in your records. If something changes, issue the credit note immediately. That keeps your VAT reporting accurate and prevents confusion on both sides.

Decide how the credit gets settled

There are a few options, depending on whether the customer has already paid:

• If they haven’t paid yet: The credit note reduces the total they owe. You can send them both documents and ask them to pay the difference. Your books should show the invoice minus the credit, with the balance outstanding.
  
• If they already paid: You owe them money. Either issue a refund or agree to apply the credit to their next invoice. Both options are fine. Just ensure it’s clear to the customer.
  
• If it’s a future credit: When you apply a credit note to the next invoice, reference it directly (e.g., “Less credit note #CN-104: -€100”) so both of you can track it.
  

Include all required information, every time

The Belastingdienst expects a credit note to match the compliance level of a regular invoice. That requires proper numbering, customer and business details, item descriptions, VAT breakdown, and total, clearly marked as negative. If any of that information is missing, the document might not hold up in an audit.

Every credit note should also point directly to the invoice it adjusts: invoice number, date, and ideally the specific line items or charges being reversed. This makes the correction easily traceable.

Keep the customer in the loop

A credit note should be clear and easy to read. When you send it, include a brief explanation: what changed, why it’s being issued (e.g., returned item, discount after order), and how you’re handling it (e.g., refund, balance adjustment). This prevents unnecessary back-and-forth later.

Track it properly in your books

Every credit note needs to be recorded alongside its matching invoice. Good software will do this automatically. If you’re recording manually, assure that the customer’s account balance reflects both documents and adjust your revenue accordingly. Credit notes reduce your income and VAT collected.

Watch for patterns

Over time, you can learn a lot from your credit notes. Are they mostly due to returns, frequent billing errors, or last-minute cancellations? Spotting trends gives you a chance to tighten your internal processes and spend less time fixing avoidable mistakes.

Never overwrite or delete an invoice

If you’ve sent an invoice, it’s permanent. Don’t edit it or remove it from your system. If it needs to change, credit it. Every invoice and credit note should have its own place in the numbering sequence, with no gaps or duplicates.

Store credit notes for at least seven years

The record can be digital or physical. Just ensure you can pull up the full document and its original invoice on demand.

Use software to automate the process

Many invoicing and accounting tools let you generate credit notes directly from the original invoice. That means all the required information is prefilled and correctly formatted. With one click, the system assigns a credit note number, links it to the invoice, adjusts your revenue, and handles the VAT.

How Stripe Invoicing can help

Stripe Invoicing simplifies your invoicing process—from invoice creation to payment collection. Whether you’re managing one-time or recurring billing, Stripe helps businesses get paid faster and operate more efficiently:

• Automate accounts receivable: Easily create, customize, and send professional invoices—no coding required. Stripe automatically tracks invoice status, sends payment reminders, and processes refunds, helping you manage your cash flow.
  
• Simplify credit note creation: Generate a credit note straight from the invoice view. It’ll automatically sync to the customer’s balance, trigger a refund if needed, and show up in your records without manual entry.
  
• Accelerate cash flow: You can reduce days sales outstanding (DSO) and get paid faster with integrated global payments, automatic reminders, and AI-powered dunning tools that help you recover more revenue.
  
• Enhance the customer experience: Deliver a modern payment experience with support for over 25 languages, more than 135 currencies, and over 100 payment methods. Invoices are easier to access and pay through a self-serve customer portal.
  
• Reduce back-office workload: Generate invoices in minutes and minimize time spent on collections through automatic reminders and a Stripe-hosted invoice payment page.
  
• Integrate with your existing systems: Stripe Invoicing integrates with popular accounting and enterprise resource planning (ERP) software, helping you keep systems in sync and reduce manual data entry.
  

Learn more about how Stripe can simplify your invoicing process, or get started today.