The flurry of publicity continues over the Voluntary Disclosure Program. The Deputy Minister of Finance had already announced, in November 2009, that he would raise the penalty for voluntary disclosure in the course of 2010. Now further details have been made public. As of July 1, 2010, the penalty that can be imposed on a taxpayer making use of the Voluntary Disclosure Program, after the first two penalty-free years, will be raised from 15% to 30%.
Under tax law, penalties can be imposed with regard to personal income tax (among others) if a taxpayer deliberately submits a tax return that is too low or when an insufficient levy of tax is imputable to gross negligence or intent. These penalties can reach a maximum of 100% of the tax either not paid or underpaid. Since July 1, 2009, a maximum penalty of 300% can be imposed, but only on underpaid tax on income from savings and investments in Box 3. Raising the penalty to 300% is one of the means that the Deputy Minister employs to trace bank accounts abroad that have not been declared.
Voluntary Disclosure Program
If taxpayers still wish to declare any income to the Dutch Revenue that has erroneously not been declared, they can make use of the Voluntary Disclosure Program. Taxpayers providing full disclosure before they could reasonably suspect that the Dutch Revenue or the FIOD/ECD is on their trail must, of course, pay the tax owed with interest. Taxpayers who made use of the Voluntary Disclosure Program before January 1, 2010, were, however, not penalized. That led to a rush of people turning themselves in through voluntary disclosure just before the New Year. From January 1, 2010, taxpayers only have two years from the filing of a personal income tax, corporate income tax, or gift and inheritance tax return that is too low to provide full disclosure without being penalized.
In 2010, the penalty for voluntary disclosure after two years is raised from 15% to 30%
A new Dutch Revenue Administrative Penalties Decree states that the penalty accompanying use of the Voluntary Disclosure Program will be reduced to 15% of the underpaid tax if the taxpayer makes use of the program within two years of submitting a tax return that is too low. This means that the penalty for undeclared Box 3 income will be reduced to 5% of the statutory maximum. This still means that the penalty is 15% of the underpaid tax. As of July 1, 2010, the average penalty will be raised to 10% of the statutory maximum, thus, a penalty of 30%.
Supplementary assessment period
In matters concerning foreign savings, the Dutch Revenue can impose supplementary income tax assessments for up to 12 years retroactively on the undeclared interest from such bank accounts. This regulation is, for that matter, valid for all undeclared domestic and foreign income, and is thus not solely applicable to foreign savings.