If you have not yet filed your 2013 personal income tax return, then this is your final call. Please take action if applicable.
2013 extension rule
The 2013 personal income tax return is due when:
– you have been invited to file an income tax return
– when you know you need to file an income tax return or
– when you already received a 2013 preliminary refund.
The invitation for the income tax return is actually the tax return issued to you by the tax office or a letter stating that you have to file before April 1, 2014.
You know, or as legislation states ‘ should know’, that you need to file an income tax return is when you have had multiple employers, or income outside employment, result from your company or world wide assets exceeding the tax free amount. This is not a limited list, but a good indication.
The preliminary refund is most of the time granted in relation with the deductible costs you pay for the house you own being your main residence.
If you have not filed now, and the above qualifies for you, then you are in the extension rule.
The extension rule is a facility granted to tax advisors to spread the load of tax returns over a more than 12 month period. Such a facility is not something a private individual can request for.
Final 2013 deadline
The final deadline is April 30th. If you have not filed the 2013 income tax return by then, this could have implications. If an actual tax return was issued to you, then you are now too late. Being late implies an irrevocable penalty for being late. This penalty starts at EUR 226 for the first time, then EUR 984 for the second time and the third time we have not experienced yet. The reason is that you are no longer granted extension in filing if you have proven to be late during the past two years.
If no tax return has been issued to you, but you ‘ should have known’ to file a 2013 income tax return, then you cannot have missed the deadline, as no tax return was issued to you stating a deadlin. However, the rule states you should have filed a tax return if you knew you were due a tax return, within 14 days from the deadline of the applicable year. The deadline was April 1, 2014. Missing this deadline does not yet lead to a penalty, but we suggest not to postpone the filing of the tax return any longer.
We cannot imagine a situation why you would still not be able to file the 2013 income tax return, unless you have indeed had an extreme situation such as death of your tax partner, burned down house including tax related papers. Most of the time being late is negligence or knowledge you need to pay tax.
Delaying paying income tax using extension rule
If you know you need to pay income tax for instance due to freelance work on the side, or Box 3 wealth tax, then delaying this payment is not to your advantage. The reason is that after some period the tax office will charge interest over the amount of income tax due, as the tax office has the opinion not to be regarded an organization with banking facilities. Moreover, the interest you pay is more than the interest you can gain yourself.
Besides the interest disadvantage, delaying one tax return implies the following tax return will come in a shorter distance, time wise. To make matters worse, once the tax office knows you need to pay tax, a preliminary assessment of the current year is already issued. So before you know it, you have to pay three assessments. The one you delayed to the very end (for instance 2013), the one of the past year (2014) and a preliminary assessment of the current year (2015). Paying three years tax at one moment implies you could have issues making the payments.
We are tax advisors, hence we have the extension rule. Our clients know that we prefer not to delay the tax filing. We even prefer to meet the deadline set by the Dutch tax office. For the personal income tax return this is May 1, 2015. Sometimes meeting this deadline is simply not possible. Because information needs to come from abroad, or our client is abroad for business or pleasure. Then the extension rule is being applied. All good things come to an end, even the extension rule. For 2013 the final deadline is April 30th next. Please file in time and we will be glad to assist.