Selling subscriptions and bundles: VAT and spreading revenue

Written by Ilias Aarrass6 min read · Published on 18 September 2026 · Last reviewed on 18 September 2026

In short

With a yearly plan invoiced up front you pay all the VAT in that period, while spreading the revenue across the months in which you deliver the service.

If you receive a prepayment without an invoice, you must still send that invoice and declare the VAT.
The part relating to a later year sits on your balance sheet as deferred income.
A bundle that expires unused still falls into your revenue.
If a client cancels, you correct with a credit note in the period of the credit.

More and more freelancers work with fixed monthly amounts: a maintenance plan, a bundle of ten treatments, a service contract or a yearly package paid in advance. That is good for your revenue, but it makes your bookkeeping a little more complex. VAT often belongs to a different moment than the revenue. This article explains when you pay the VAT, how to spread the revenue across the term and what to do if someone cancels halfway.

VAT follows the invoice, not the service

The main rule is simple: you pay VAT in the period in which you invoice. Send an invoice in January for a yearly plan and all that VAT sits in your first-quarter return, even though you deliver the service for another eleven months. If you receive a prepayment without an invoice, you must still send that invoice and declare the VAT in that period. See booking advances and deposits.

If you invoice monthly or quarterly, it runs in step and needs no attention. If you work with yearly amounts in advance, bear in mind that you have a hefty VAT payment in that one quarter while the work is still to come. Set that VAT aside, see how much to set aside.

Spreading revenue across the term

For your profit something different applies than for VAT. If you receive the subscription fee for the whole of next year in November, that revenue belongs to the months in which you deliver the service, not to November. The part relating to next year goes on your balance sheet as deferred income. That way your profit falls in the right year and you are not surprised by an assessment on money you still have to earn. See reading a balance sheet and profit and loss account.

The same applies to costs you pay in advance, for example a software licence or insurance spanning two years. Those are spread too: the part belonging to next year sits on your balance sheet as a prepayment. That is exactly the kind of item you review at year-end, see the year-end checklist.

Worked example: a yearly plan invoiced in November

Invoice: 12 months of service: € 1,200 + € 252 VAT
VAT in your return: € 252 in the fourth quarter
Revenue this year: November and December: € 200
Deferred income on your balance sheet: € 1,000

Result: You pay the full VAT this quarter, but only € 200 sits in this year's profit. The remaining € 1,000 falls into next year's revenue, in the months in which you actually deliver the service.

Bundles and credits

If you sell a bundle of ten treatments or a block of hours, the client pays in advance for a defined service. You invoice on sale, pay the VAT in that period and spread the revenue across the moments the sessions are used. If a card expires with sessions unused, the remainder still falls into your revenue: you kept the money.

A gift voucher is different, because it is not always fixed what will be bought and at which rate. The rules are in discounts, gift vouchers and credit notes: what about VAT. Make clear in your terms how long a card is valid and whether it is transferable, see terms and conditions.

Cancellations, refunds and clients across the border

If a client cancels halfway and you refund part of it, you issue a credit note for that part and correct the VAT in the period of the credit. You never change the original invoice; it has been sent and counts in your numbering. See credit notes and correcting a wrong invoice.

If you sell subscriptions to clients in other EU countries, check whether they are digital services to consumers: the one-stop shop applies once you pass € 10,000 of EU turnover, see VAT on digital services and the OSS scheme. If you supply businesses with a valid VAT number, you reverse-charge, see VAT with clients abroad.

Frequently asked questions

When do I pay VAT on a yearly plan?

In the period in which you invoice, so all the VAT at once. You do spread the revenue over the term, but that is separate from the VAT.

What about a bundle that expires?

The unused part falls into your revenue when the card expires; you kept the money after all. You already paid the VAT on sale.

A client cancels and wants a refund. How do I book it?

With a credit note for the refunded part. You correct the VAT in the period of the credit note, not in the original period.

Must I put prepaid amounts on my balance sheet?

Yes, the part relating to a later year. That way your profit falls in the year you deliver the service, not the year the money arrived.

Sources

Advance invoices and the VAT on themBelastingdienst · belastingdienst.nl
Invoice basis: when VAT becomes dueBelastingdienst · belastingdienst.nl

Sources checked on 18 September 2026

This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.