The entrepreneurs preliminary assessment is in general the most disliked document the tax office can send. What is that about?
Entrepreneurs preliminary assessment
The calendar year has just started, it is now January 2022, and you already receive a blue envelop. The blue envelop is a message from the tax office. Like the very purple envelop is from the CJIB, the bureau of speeding tickets (I have been told of course). Now the Chambers of Commerce also uses purple, so I hardly dear to pick up the mail these days.
You open the blue envelop and you see you need to pay an amount in tax. That can spoil an entire day is my experience. It is the upfront 2022 tax assessment. You have not earned a dime yet and you are to pay the tax already.
A side note – mind scams
The fact that the CJIB, chambers of commerce and the Dutch tax office send message via regular mail using these colors, implies no email messages are send. If you receive an email message, or silly computerized phone message that you have outstanding debts with either of these organizations. This is a scam, not true, do not ever pay. If you are in doubt, contact us or the origination it concerns. Never use the contact details presented by you by this scamming organization
Instant response to tax assessment
The instant response to the above tax assessment is to ask your tax advisor, that will be us, to nullify this assessment. As this behavior was anticipated by the Dutch tax office, some measures have been taken by te Government to prevent that.
First you cannot appeal such an assessment, you can only file another preliminary assessment request. Neither can you call the tax office to have it changed. So obstacles have been put in place to stop you from paying.
Second, the law has changed on a minor details, with huge consequences. If you, for the purpose of ease, nullify this assessment. The moment the year ends and it turns out you should have paid more or less the amount of the preliminary assessment, you committed a crime. A crime for which you can be penalized obviously.
Why is this assessment send now already?
If you would have been an employee, you are paid a salary. You are not paid the gross salary, but you are paid the net salary. Why are you not paid the gross salary? The Dutch tax office recognize you as a human being, a human being will spend the full amount of the gross salary. Then the end of the year is there, and you are to pay the tax over your salary and there is nothing left to do so. Hence you are paid the net salary.
This principle the Dutch tax office also would like to put on the entrepreneur. Pay as you go. If the assessment is settled by you in 12 months period, it could work out like the situation of the employee.
What if your result for the coming year is very much different?
You are the entrepreneur, nothing is a given in your world. Suddenly a pandemic happens and there is not more business. Then you can send in the request to nullify the result. A very understandable situation.
However, during the year it turns out the pandemic did not hit you at all. Even better, your result is higher than previous years. Then you cannot sit on your hands, but you need to send in the same form, but now with the predicted result.
Tax is exciting
We think tax is exciting. This preliminary assessment is an event. Some entrepreneur accept, some do not. We are asked to reduce the amount and at the end of the year the same entrepreneur has to pay a substantial amount of tax, but has no money. That is exactly what the tax office would like to prevent. The preliminary assessment tries to moderate the liquid position of the entrepreneur, which is a good thing.