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Fail to file your entrepreneurs income tax return: no entrepreneurs tax credit

We think you should never fail to file your income tax return if you are invited to do so. Failing to file your entrepreneurs income tax return is more serious and does have consequences.

Fail to file your entrepreneurs income tax return

If you are an employee, your employer has already withheld your income tax. Often you as employee are not even invited to file the income tax return. Not filing the entrepreneurs income tax return is in a different category, as that is the only method for the Dutch tax office to collect income tax with you.

Moreover, in the entrepreneurs income tax return you can tick the box to apply the entrepreneurs tax credit (Zelfstandigenaftrek). Not filing, implies you also did not tick the box.

Court case

A Dutch tax payer had registered a wholesale company but never filed his 2016 tax return. The tax office invited him, reminded him summoned him. He did not file the 2016 entrepreneurs income tax return.

The tax office has then a simple but very effective method. They issue an ex officio assessment for an amount to be paid in tax to which most people do respond. In horror. Increased with EUR 369 fine for filing too late. What every is done later, will not make this fine go away. Too late is too late.

The tax payer was indeed horrified by the amount and decided to file and claim the entrepreneurs tax credit in the income tax return. This credit was refused by the Dutch tax office.

Fail to file your entrepreneurs income tax return
Entrepreneurs income tax return

Surprising move

The tax office made a surprising move, they stated that due to the fact that the tax return was not filed in time, the right to the entrepreneur tax credit was void. Now the tax payer had to proof he was entitled to the entrepreneurs tax credit. So the situation from ticking a box was turned to proof the box can be ticked.

The tax payer provided an overview of the hours worked – denied.

The tax payer provided photo’s of opening times of the company – denied

Both manners of proof was not exact and too random to state anything. Did not proof he worked, it proofed the shop was open for business, but not that he was doing the business.

The court ruled that the tax office was right in the fact that the tax payer was not able to proof that the conditions were met to apply the entrepreneurs tax credit.

Tax is exciting

We think tax is exciting and we are excited about filing your tax return. In time that is. Nobody gets excited about a fine for filing too late. In the above court case such a fine was issued, as he was too late. But also the entrepreneurs tax credit which is normally a simple box to be ticked was not granted to him. We always recommend you to file in time and as you experience above, it could costs you more than the EUR 369 fine for being too late.

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