The 2024 tax assessment. Maybe you already received it, and the year hardly began! Can I not simply ignore it? No you cannot. Here is why.
2024 tax assessment
The 2024 tax assessment if a request from the tax office to pay now already the expected tax for the year 2024. It is a request, but if you fail to comply, you are reminded. The first reminder is not that bad, but the follow up reminders included penalties for being late. In other words, ignoring the request, which is actually a demand, is expensive.
What is the 2024 tax assessment about?
Multiple flavors we have, all based on the past, not necessarily the present.
The most common preliminary assessment is for self-employed persons. The previous year’s tax return showed a profit. That profit is used as indication of the 2024 tax expected to be paid.
Also common is for individuals that have a Box 3 asset tax to be paid. The percentage increased over time, hence the amount of this assessment did as well.
Corporates are treated not different from self-employed persons. If the corporate showed a profit in the past, a 2024 preliminary corporate tax assessment is imposed on the company.
You have no company, no Box 3 assets, but you had Airbnb income in the past. Or you received partner alimony, or you received reimbursements for lecturers you gave in the past. All reason enough to issue for 2024 a preliminary tax assessment.
Why am I send the 2024 assessment?
The tax office is basically afraid you spend it all before you can pay the tax. The parallel is drawn with employment. The employer withholds already from the salary specification the tax over your employment income. The same analogy is applied for other sources of taxable income via the 2024 tax assessment.
Can I adjust the 2024 assessment preferably to nil?
You can adjust the 2024 assessment. That is done by sending the 2024 preliminary return to the tax office. If you expect a different self-employed income, different Box 3 taxation, different corporate taxable income or your Airbnb or alimony income is different.
Reducing the amount to nil is tricky. If the next year it shows you had 2024 taxable income and not that different from what the tax office expected, you are in trouble. Also the person who assisted you with this reduction to nil is in trouble, when it was clear at the time of such a request the taxable base would not be nil. The penalty is a fine for the tax payer, but for the person who assisted it could be a jail sentence.
What to do?
The moment the base of taxation is not correct, you adjust the base.
When the amount is more or less correct, you can chose to pay the amount in full before February 29. You can also chose to pay in 11 installments, first installment to be paid before February 29, then every month.
If you chose to adjust the amount, be aware that the process of the adjustment could take longer than February 29 is reached. Please do pay at least 1/11 of the original amount, to prevent a reminder fee.
Is the 2024 tax assessment an annoyance or effective?
Annoyance is the initial reaction obviously. Then again, if you process your 2024 tax return in 2025 and you see that the majority of the tax was already settled during 2024, is effective. Plus, should 2024 turn out to be not so good year for you, you can adjust the 2024 preliminary assessment.
That stated, the other way around, a better result than expected, should also imply an adjustment of the 2024 tax assessment.
Tax is exciting
We think tax is exciting. So far we have not experienced a person or company being excited about the preliminary assessment. The frequent reaction is to reduce the amount, preferable to nil. It is a lot of money.
The moment realization kicks in that it can be paid in installments, that is it more or less what is to be paid next year, some even find it a relief to have this burden settled already.