Additional tax assessment

You may be faced in the Netherlands with an additional assessment if the tax that should have been paid on your tax return (such as turnover tax/VAT and BPM) or remitted (such as payroll tax and dividend tax) has not been paid in full or partly, or if an (excessive) exemption, reduction of withholding or refund has been wrongly granted.

In short, the bottom line is that too little tax has been paid. Whether you can be blamed for paying too little tax is not relevant for the imposition of an additional assessment . This is only relevant if the Dutch Tax Authorities want to impose a fine or if the Public Prosecutor addresses you criminally.

Imposing an additional tax assessment is therefore the methodology for the tax authorities to still receive the underpaid tax.

Some examples in which additional tax assessments are imposed are:

• If the zero VAT rate or the right to deduct input tax is refused;
• If no/insufficient remittance of sales tax due has taken place;
• No or too little transfer tax has been paid;
• No or too little dividend tax has been paid.

Over what period can an additional tax assessment be imposed?

To ensure legal certainty, the Duch Tax Authorities cannot go back in time indefinitely to levy the underpaid tax. An additional tax assessment can be imposed for a period of five years. This period starts to run after the end of the calendar year in which the tax liability arose or the refund was granted. The aforementioned period cannot be extended in case an extension for filing the tax return has been granted or later correction notices have been sent. Five years, therefore, remains five years in principle.

For real estate transfer tax, a deviating period of 12 years still applies if the tax liability has arisen through the acquisition of the beneficial ownership of immovable property.

It is therefore always important to check carefully whether the period for imposing an additional assessment has not been exceeded.

What can you do against an additional assessment?

Do you disagree with the amount of the additional tax assessment or has the additional tax assessment been imposed wrongly? Then you should file an objection within 6 weeks after the date of the additional tax assessment. Focus the objection not only on the amount of underpaid tax but also on the tax interest and (misdemeanour/default) penalty. Also request a postponement of payment.

If you are too late, the additional tax assessment is irrevocable. You can then only request the inspector to reduce the additional assessment ex officio.

Can the Dutch Tax Authorities also impose a fine?

The Dutch Tax Authorities can also impose an omission penalty or an infringement penalty. A default penalty will be imposed if the tax has not been paid, partially paid or not paid within the term. This does not require the inspector to blame you for intent or gross negligence. The default penalty, after reminder, amounts to a maximum of €136. For the payroll tax return, the default penalty is a maximum of €1,377. As a matter of policy, both penalties will (normally) be mitigated to €68.

In contrast, can you be blamed for intent or gross negligence for underpayment of tax? Then the Dutch Tax Authorities can impose a penalty of up to 100% of the underpaid tax. Note that the burden of proof for this lies with the Dutch Tax Authorities! The Dutch Tax Authorities must then prove intent or gross negligence!

In some (serious) cases, the Dutch Tax Authorities can also choose not to impose a fine and leave the punitive element to the Public Prosecutor. The Public Prosecutor is then the one who will criminally prosecute you .

Need help?

Have you received a fine and do you wish to take action? Contact one of our specialised lawyers immediately! They will guide you through the entire process.