Voluntary disclosure scheme

The Dutch State Secretary of Finance has announced in a letter dated 17 January 2017 the intention to discontinue the voluntary disclosure scheme.

At the moment a personal income tax payer who within two years voluntarily corrects his/her tax return is, in principle, not penalized for the offense. After the two year term a personal income tax payer is penalized with a penalty of 120% (40% of the 300% maximum penalty) of the additional tax due when it concerns income from savings and investments. The penalty due has been increased from effectively 60% to 120% as per 1 July 2016.

It is now proposed to discontinue the two year penalty free window, such that a personal income tax payer who voluntarily corrects his/her tax return is at all times liable to the penalty of 120%. The fact that such a tax payer has voluntarily disclosed the information necessary to impose a correct tax assessment remains a reason for a reduction of the penalty. When approved in Parliament the amendments may have effect as per 1 January 2018.

Other changes have also been proposed and concern further regulatory measures for bearer shares to enable tracing the beneficiary more easily; the possibility to penalize a (tax) advisor that has enabled tax evasion (belastingontduiking); the publication of the name of penalized (tax) advisor; and to limit client attorney privilege when it concerns determining the tax due.

Would you like more information or would like further advice, please contact Buren.