Taxes in the Netherlands - Part 5

This is the fifth article in our Tax in the Netherlands series. In this part we will discuss requests for an extension of filing the tax return and the consequences thereof, and the penalties for the late submission of returns.

Extension of filing of tax return

The deadline for submission of income tax returns has lapsed. The deadline was April 1. If you have received a tax return form it is recommended that you do your tax return as soon as possible. If you do not do this in time the tax authorities may impose fines (see below for further information).

Tax service providers can implement a special arrangement with the tax authorities. This allows us to request deferral of tax returns for our clients, which in turn gives us the extra "breathing space" to submit all tax returns of our clients by May 1, 2012.

This arrangement is not without obligation. We must submit a certain percentage of our clients’ tax returns every month. If we fail to meet this obligation then the whole deferral scheme will be repealed for all of our clients. For new clients we can also request the income tax return deferral after April 1, 2012 provided that no reminders to submit the tax return have been sent.

Consequences of the deferral scheme

The Dutch tax office has up to 3 years to make their final assessment. If you are granted the filing extension, this period is extended by a certain period of time. Note that the entire extension period is taken into account, not only the period of deferral ultimately used. In practice, this means that the time period for the imposition of a final assessment is extended by one year.

The deadline for benefit / allowance applications is also extended. If no deferral is granted to you, then the request for a benefit / allowance must be submitted before April 1 of the year following the year for which you are applying for the allowance / benefit. (A request for an allowance over the 2011 year must be submitted by April 1, 2012).

Penalties for late filing or failure to file income tax returns

The Dutch income tax return 2011 must be filed with the Dutch tax authorities before April 1, 2012. If you submit your tax return too late (or not at all) you may receive a substantial fine, the default penalty.

Since January 1, 2009, the fining policy of the Dutch tax authorities has been severely tightened and the penalties have increased.

The frequency of breaches also affects the severity of the penalty:
› For the first (single) late submission of the income tax return, the default penalty amounts to 226 euros
› For the second late submission of the income tax return the default penalty amounts to 984 euros
› By systematic late submission of income tax returns the default penalty amounts to 4.920 euros

If the deadline for filing the income tax return has lapsed and you have failed to comply, the Dutch tax authorities will send you a reminder. In this reminder you receive a window of 10 working days to submit the return.

If you again fail to comply within the timeframe the fine will start to accumulate within seven days.

The Dutch tax authorities also impose default penalties for making false declarations and for not applying the necessary correction. In both cases the fine is 1.200 euros.


Nico Koppel is an Expat Service Provider, who specialises in tax advice & accountancy. For more information, please comment below or visit Koppel Tax Consultants.