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New Tax Interest Regime To Replace Levy Interest Regime

Netherlands
On 1 January 2013 the levy interest (heffingsrente) regime is going to be replaced by a regime which will be called 'tax interest' (belastingrente).

The principal aim of the new tax interest regime is to put an end to taxpayers using the tax authority as a savings bank. Taxand Netherlands discovers the implications of the new regime on Dutch taxpayers.

Some taxpayers abused the levy interest regime by setting aside their excess cash with the tax authority, where it collected interest at the favourable levy interest rate. They were therefore technically using the tax authority as a savings bank. The tax interest regime aims to end this abuse and the government estimates that the tax interest regime is going to benefit the budget by EUR400 million.

Taxpayers will be charged tax interest in the event that they still owe tax over an assessment period 6 months after the end of that period. The tax interest is calculated over the period stretching from the date which falls 6 months after the end of the relevant assessment period to the date which falls 6 weeks after the date of the relevant assessment.

The tax authority will, in principle, no longer reimburse interest in the event that it is required to refund tax to a taxpayer on an assessment. An exception to this rule is made in the event that the tax authority is late to issue an assessment on which a refund of tax is due.

Discover more: New Tax Interest Regime to replace Levy Interest Regime


 

Your Taxand contact for further queries is:
Gertjan Hesselberth
T. +31 (0)20 301 66 33
E. gertjan.hesselberth@vmwtaxand.nl

 

Taxand's Take

Taxpayers are advised to make a tax calculation at the end of the assessment period based on the preliminary accounts for that period. Taxpayers can avoid having to pay tax interest provided that they pay the tax which is due within 6 months from the end of the relevant assessment period. Considering that the tax authority has to issue a tax assessment within 8 weeks from a formal request and in view of the fact that tax interest over the period ending 6 weeks after the date of the assessment, it is advisable to ask for a preliminary assessment not later than 14 weeks before the 6 month period.

Taxand's Take Author

Gertjan Hesselberth
Netherlands