Current liabilities (kortlopende schulden)
Current liabilities are obligations that must be settled within the applicable short term, usually one year.
What do current liabilities mean?
Current liabilities are obligations that must be settled within the applicable short term, usually one year.
These include trade payables, tax liabilities and the current portion of loans. A high level at the balance sheet date can strongly affect the liquidity ratio.
How does it work?
A debt is current if its remaining term is at most one year, counted from the balance sheet date; that is also how it appears in the formats of the Decree on annual accounts formats. The law lists the kinds of debts, from banks and suppliers to taxes, social security contributions and pensions (art. 2:375(1) DCC), and requires, per kind, the amount that runs for longer than one year (paragraph 2).
What counts is not the original term but the due date at the balance sheet date. A current account facility that the bank can terminate is current, even if it has been running for years. Under RJk B9.206 (RJ 254 for medium-sized and large), the same applies to a long-term loan that has become repayable on demand because the loan conditions were not met at the balance sheet date, unless by that date the bank has waived repayment or a recovery period of at least twelve months after the balance sheet date has been agreed. An agreement after the balance sheet date but before preparation is also acceptable, with a note.
Example
A transport company (BV) has on 31 December 2026: accounts payable € 48.000, VAT for the fourth quarter € 11.500, payroll tax for December € 7.200, accrued holiday pay € 9.800, a current account at the bank € 22.000 and a bank loan of € 120.000 of which € 24.000 is repaid in 2027. Current: 48.000 + 11.500 + 7.200 + 9.800 + 22.000 + 24.000 = € 122.500. Non-current: € 96.000. With current assets of € 147.000 the current ratio is 1,2.
In the annual accounts
Liabilities and equity side of the balance sheet, all size classes.
Difference from non-current liabilities
The boundary lies at twelve months after the balance sheet date. The RJ and the RJk recommend including the repayment due in the coming year under current liabilities (RJk B9.206; RJ 254). If a medium-sized or large entity leaves it with the loan, it states the amount (art. 2:375(6) DCC); a small entity need not (art. 2:396(3) DCC). See also the repayment for next year.
Common mistakes
- Leaving repayments within a year as non-current without stating the amount
- Booking a debt only after payment
What to watch for
- Look for debts without an invoice: holiday pay, invoices still to be received, interest up to the balance sheet date, the last VAT and payroll tax return.
- Read the credit agreement for covenants and terminability before you call a bank debt non-current.
- Micro: one item of debts, split into shorter and longer than one year (art. 2:395a(4) DCC). Small: no breakdown by kind of debt needed (art. 2:396(3) DCC). Medium-sized and large: the full classification of art. 2:375.
Legal basis and source
art. 2:375 DCC
Frequently asked questions
Is corporate income tax for the financial year a current liability?
Yes, to the extent that it has not yet been paid through provisional assessments. The difference between the tax calculated on the profit and the provisional assessments paid appears under debts in respect of taxes.
Does income received in advance belong to current liabilities?
Yes. An amount the customer has paid in advance for a performance you still have to deliver is an obligation (article 2:375(1)(c) DCC).
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Preparing Dutch annual accounts?
Your first set of annual accounts is free, for every size class. Create an account and prepare the annual accounts of your Dutch company under Title 9 of Book 2 of the Dutch Civil Code.
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