Outstanding value-added tax charges
The Tax and Customs Administration has recently embarked on a drive aimed at the collection of outstanding value-added tax charges. It does this by comparing value-added tax liabilities as per the balance sheet with the value-added tax returns of the businesses in question, with the aim of bringing to light any contingent value-added tax liabilities for which no tax returns have yet been filed. The majority of these pertain to value-added tax adjustments having been established but not yet reported by means of a supplementary tax return.
If you use the services of an accountant, we would advise you clearly to agree with him or her which of you will be responsible for filing supplementary tax returns.
The recent focus on outstanding value-added tax charges has sent quite a few feathers flying. Businesses are being presented with critical questions, to the point where they are having their value-added tax records audited. A recent request made under the Government Information (Public Access) Act of the Netherlands cleared the way for a consultancy to look into the tax and Customs Administration’s penalty policy. Discrepancies of up to € 50,000.00 are taken care of by the tax authorities by means of a 10% default surcharge each, without further investigative action being taken. Discrepancies in excess of € 50,000.00, by contrast, will trigger an audit of the relevant business’ value-added tax records, in order for the tax authorities to pinpoint who has been to blame for the shortfall in reported value-added tax and check whether the value-added tax records as such are in good order. An offence-related penalty ranging from 25% to as much as 50% may be imposed on the offending party where it is established that the failure to settle up the value-added tax in question has been due to intent or gross negligence on the part of the tax payer.
The moral of this story? Make sure that you report any outstanding value-added tax charges by filing a supplementary tax return, so as to avoid steep penalties!
Your tax consultant in Amsterdam will take care of your tax returns!