The 2010 Tax Plan introduced a penalty for failure or partial failure to pay, or failure to pay on time, of personal income tax, corporate income tax, gift tax or inheritance tax. This penalty may be imposed as of January 1, 2011, and is limited to EUR 4,920.
The reason for introducing this penalty, as explained by the Deputy Minister of Finance, is to have the same treatment of payment defaults regarding tax payable on assessment, as in the case of the taxes mentioned above, and tax payable on returns, as in the case of, for example, payroll tax and VAT. He backed this up by referring to statistics from the Dutch Revenue showing that, in 2008, 21% of all personal income tax returns and 35% of all corporate income tax returns were not paid on time. In his view, given the equal importance of payment obligations regarding both tax payable on assessment and tax payable on returns, payment defaults for both should be treated in the same way.
The new penalty for payment defaults will not be imposed automatically. The tax collector will determine the necessity of the penalty in each individual case. Only cases concerning taxpayers who consistently fail to pay or are consistently late in paying their taxes will be affected.
In the legislative history, the Deputy Minister announced that he planned to set the level of the default penalty at 5% of the amount in taxes that was not or partially not paid, or paid too late, up to a maximum of EUR 4,920. To date, however, no policy guidance has been issued on this.
Conclusion
The introduction of this default penalty has increased the importance of timely payment of outstanding installments on personal and corporate income tax assessments. The tax collector was already entitled to send a reminder and issue an enforcement order in the case of failure to pay on time. As of January 1, 2011, he may also impose a default penalty of up to EUR 4,920. The penalty may be imposed with regard to payment defaults occurring after January 1, 2011.