Missing the voluntary disclosure boat

Voluntary disclosure to the Tax Office counts as a mitigating circumstance. Voluntary disclosure by a tax payer occurs when the latter (belatedly) furnishes the correct information before he or she knows or reasonably presumes that the Tax and Customs Administration is, or is about to become, aware of the inaccuracy or incompleteness of his or her tax return. The District Court for Guelderland dismissed a tax payer’s argument to the effect that reliance on voluntary disclosure should continue to be possible as long as there was a real likelihood that the Tax and Customs Administration might never discover the tax return’s irregularity.

The Court arrived at its conclusion in a lawsuit brought by a client of Swiss-headquartered UBS Bank. On 23 July 2015 the Dutch Tax and Customs Administration had asked its Swiss counterpart for information concerning some of UBS Bank’s Dutch account holders. Having asked its Dutch clients as early as in 2014 to provide it with proof of correct tax returns having been filed, UBS Bank went on to notify its Dutch clientele of the Dutch Tax Office’s 2015 request for information. The Swiss Tax Office’s publication of an official announcement regarding the request for information triggered reports on the matter by Dutch media. These appeared on 27 September 2015. According to the District Court this left just one conclusion to be drawn, which was that objectively speaking the bank’s client had known, or could have had an inkling, that the Dutch Tax and Customs Administration would find out about his Swiss bank account. Not only had his reliance on voluntary disclosure not occurred until later, but it had subsequently taken him more than four months to provide the Tax and Customs Administration with comprehensive details concerning said bank account.

Dutch version: Te late inkeer