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Dutch corporate income tax penalties

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Dutch corporate income tax penalties are serious amounts. Nothing exciting about the penalties, but we are excited to see how we can prevent penalties for your company.

Dutch corporate income tax penalties

The Dutch corporate income tax applies to corporate companies that operate in the Netherlands. Whether that is a Dutch BV company, or a registered German GmbH, UK Ltd, US Inc or what have you. The Dutch corporate tax rules applies to these companies.

The Dutch tax office demands you to file the corporate income tax return before June 1 following the calendar year. That is when your company has the calendar year as book year. The moment your company has a different period as book year, the company is supposed to file within five months from the end of that period.

Example. A company has in the home country a book year starting April 1 till March 31. From an accounting point of view it is the desire to connect the Dutch tax period to that book year. This can be arrange the moment the branch or subsidiary is registered in the Netherlands.

A Dutch BV company always needs to file a Dutch corporate income tax return, even when the company moved abroad. The company was incorporated in line with Dutch law, hence always subject to filing a Dutch corporate income tax return. Even if that would be a nil return.

Reporting

In the news you see sometimes large stock exchange companies reporting their previous year result already in the first few weeks of the new year. You ask your accountant to do the same, but that demand is received with laughter. Regular companies and accounting companies cannot meet such a demand. Neither can we. We think such firms have dedicated accounting teams.

The tax office is aware that regular companies cannot report that quick, hence five months time is given to file the corporate income tax return.

Extension in filing

Five months could be experienced as a long time, but accounting firms receive the same request from all their clients at the same time. Hence it is not always copable to meet all clients request. For that situation the extension rule is invented. The accounting firm can ask for delay in filing. Such a delay is normally granted for a one year period.

How does the corporate tax penalty fit in this system

Despite the five months period, despite the extension rule for another 12 months, companies can be too late with filing the corporate tax return. Many reasons for such a cause. We have had the pandemic, the company can be out of funds.

The worse reason for being late is that books have not  been done in time. In other words, 17 months’ time was provided and that was not enough to do the books. Whereas stock exchange companies can process larger accounting systems in a few days’ time.

The cause of being late can be an accounting company not doing its job. If that is the case, change accounting company. If the company did not pay the accounting company, then the cause is with the company. Often it is not willing to file, as then corporate tax is to be paid.

EUR 5.514 penalty for being late (2024)

The Dutch tax office is accustomed to work with less willing companies to file their corporate tax return. Hence the EUR 5.514 penalty is introduced. Such a penalty is a good enforcer to file.

The tax office is also aware that being late can happen by accident. For that reason the first time the company is late, a 50% discount is given on the penalty.

A onetime discount. The tax office is willing to work with you for one time, but the moment you are late again, the EUR 5.514 penalty is in place. Plus your rights are getting limited. The right to delay the tax filing with another 12 months is denied to you. In other words, you need to file within 5 months from the moment the book year ended.

Blocked business bank account

There are hard core companies that fail to comply. Those have been given the penalty, the rights have  been limited. Still no tax return filed. Then the tax office assumes what could have been the tax base. Calculates the tax, the penalties and the interest to be paid. For that amount the company bank account is then blocked.

Audit announcement

The moment a company is not filing, late filing, it gives an impression how the company is ran. Not a good impression. The tax office can then get worried if the accounting is done in the same manner. To secure the correct amount of tax, an audit is likely to be announced. Not only a corporate tax audit, but the full picture. Wage tax, Value added tax and corporate income tax.

Tax is exciting

We think tax is exciting. We think a company could be late one time, still we think a 50% discount on a penalty is still a EUR 5.514 penalty is a large amount. If your company is in such a situation, but not so much by will but more by lack of accounting support, please connect with us. We will be pleased to explain what went wrong with the tax return. If an incorrect tax base was filed, we can make corrections. More importantly, we will do our best to guide you out of this penalty situation.

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