June 27, 2014

Increase of interest rates

Effective 1 January 2014, the Dutch Government introduced a new interest rate for late payment of corporate income tax (CIT) of at least 8% (for 2014: 8,25%) and for all other taxes - at least 4%. Interest on CIT late payment is imposed for the period starting 1 July the year following the reporting tax period until the date of payment.

Importance of preliminary assessment

To avoid potential interest burden a taxpayer can file a request for preliminary assessment within four months following the end of the tax year. In case the amount of the preliminary assessment equals the amount of the request, no tax interest is due. If the procedure is not followed correctly, tax payers risk paying unnecessary interest costs and even penalties. As of 1 January 2014 the Dutch Tax Authorities can impose 100% penalty on the amount of underpaid tax or incorrect refund claim intentionally reported in preliminary returns.