Newsflash | 03/08/2013

Faster more certainty for taxpayers
The Cabinet has approved a bill by the State Secretary of Finance Mr. Weekers, that will grant taxpayers more clarity and certainty about his or her tax return at an earlier stage.

The statutory period under which an assessment or additional assessment can be imposed will be shortened. The bill will also make it more easier for taxpayers to revise their tax returns. The bill focuses on Personal Income Tax, Gift Tax (schenkbelasting) and Inheritance Tax.

Under the current rules it can take up to three years before a final assessment is issued (article 11-3 General Tax Act “GTA”). This three-year period is further extended by the period in which an extension for filing of the tax return has been granted.

Under certain conditions the tax inspector may impose an additional assessment if he believes that the final assessment was too low. Generally, this additional assessment can only be imposed within five years after the tax year concerned and the additional assessment is based on new facts and circumstances not previously known to the tax inspector at the time of the final assessment (article 16-3 GTA). The latter condition does however not apply if the taxpayer acted in bad faith. The five year revision period is extended to a 12 year period if the additional assessment relates to foreign source income.

Under the proposed bill the three years-period of article 11-3 GRA will be reduced to fifteen months. The time limit begins to run from the date on which the tax return was filed.

The shortened period is however only available to benevolent taxpayers. Malicious taxpayers ? regardless whether the the additional assessment relates to domestic or foreign income – will however become subject to the extended twelve-year period.

The bill makes it also easier for taxpayers to file an amended tax return after the original tax return was filed. This period will now be extended to eighteen months after the tax return is received. There will be no need for an objection against the tax assessment as is now the case. Taxpayers will however maintain their statutory protection if the taxpayer and the tax authorities disagree.

In developing this bill the State Secretary used the evaluation of the Internet consultation. “We have taken the comments very seriously. The proposal gives honest taxpayers more certainty and a simple possibility to revise their declaration. On the other hand, the statutory term to recover tax due for malicious taxpayers, will now be broadened. This provides the means to properly address taxpayers who intentionally file an inaccurate declaration” said Weekers.

The Cabinet has agreed to send the bill for advice to the Council of State. The text of the bill and the opinion of the Council of State will be published upon submission to the Lower House.