If box 1600 on your tax return suddenly shows a negative figure, you will not be able to submit your tax return. This can be particularly confusing for new sole proprietors. In this article, we clearly explain what it means, why it sometimes shows a negative value and, most importantly, how you can easily correct this using stock management.
What is box 1600 on the tax return?
This refers to your business’s gross profit. It is calculated as:
Bénéfice brut = chiffre d’affaires – coût d’achat des biens vendus
If box 1600 is negative, this means that the cost of your trade goods is higher than your turnover. This often occurs with sole proprietors who are still in the start-up phase or who do not register their inventory correctly.
Why is box 1600 negative?
There are several reasons for a negative value in box 1600 of your tax return:
1. No turnover, but costs
If you have just started and have not sold anything yet (no turnover), but have already made purchases of trade goods, your gross profit will be negative if your inventory is not filled in.
For example: you made purchases for €1,000 worth of goods, but you have not sold anything yet. In that case, box 1600 will show a negative value of €1,000.
Tip van een boekhouder
“Als je een negatieve brutowinst ziet, ben je waarschijnlijk vergeten je eindvoorraad correct toe te voegen. Dan denkt de fiscus dat deze 0 is, en je volledige voorraad dus verkocht is.”
Tip from an accountant
‘If you see a negative gross profit, you have probably forgotten to add your closing inventory correctly. The tax authorities will then assume it is 0, and that your entire inventory has therefore been sold.’
2. No closing inventory entered
For accounting purposes, trade goods that have not yet been sold must be carried forward to the next financial year via the closing inventory.
This is because the purchase value of that inventory must be allocated to the year in which you intend to sell these trade goods. If you do not do this, all purchase costs remain in the same year, causing field 1600 to become negative.
That sounds complex, but you can actually solve it very easily by simply entering a value for your inventory at year-end.
🚨 Tip: accurate inventory recording is essential for a realistic representation of your gross profit. And, moreover, it is required by the tax authorities!
How do you solve this as a sole proprietor?
You can usually solve a negative value by entering the correct closing inventory.
Example:
You bought €1,000 worth of trade goods, but haven’t sold anything yet.
👉 Enter €1,000 as closing inventory in the personal income tax module of Dexxter.
Our software will automatically carry these costs forward to the following year, ensuring that box 1600 is calculated correctly again.
This simple adjustment ensures your return is accurate and you do not report any unjustified losses.
View the video: further explanation of box 1600
Would you like a bit more explanation on this subject? In this video, we explain everything step by step:
In summary
If box 1600 in your tax return shows a negative figure, this is usually due to your closing inventory being entered incorrectly. By filling in your inventory correctly, you avoid errors in your return and get a realistic picture of your gross profit.
Want to be sure your return is correct? Then use Dexxter to manage your accounts smartly and easily. Or ask your questions directly in our community.
