Missing tax loss revision ruling

A negative “Box 1” income can be set off against positive incomes earned in previous or subsequent years. The Tax and Customs Administration will hand down a tax loss ruling in confirmation of such a negative income. Loss set-off is likewise confirmed by means of Tax Office ruling to the relevant effect. In the event that a loss having originally been authorised changes at a later date owing for example to an additional tax assessment being levied, this will affect the set-off of said erstwhile loss.

The Tax and Customs Administration originally confirmed that a tax payer’s “Box 1” income for the year 2008 had turned out negative, as a tax loss which by means of a tax ruling was set off against the tax payer’s positive income for 2005. It then went on to raise an additional assessment for 2008 resulting in the tax payer’s “Box 1” income for that year gaining a positive value. The assessment included a reference to the effect that the additional assessment had cancelled out the tax loss set-off for 2008. The Tax and Customs Administration adjusted the tax loss set-off by raising an additional income tax assessment for the year 2005, but failed to provide for the requisite tax loss revision ruling for 2008. This prompted the District Court to quash the additional assessment for 2005.

Dutch version: Ontbrekende verliesherzieningsbeschikking