Generally, the tax year is equal to the calendar year. However, corporate taxpayers may deviate from this by adopting a different financial year.
Corporate taxpayers are required to file a tax return annually. The due date is generally five months after the end of the company’s financial year. This filing due date may be extended upon request by the taxpayer.
The Dutch tax authorities generally make a provisional assessment before issuing the final assessment. The final assessment must be issued within three years following the financial year. This period is prolonged with the time of the extension for filing the tax return. The Dutch tax authorities may issue an additional assessment if it appears that the amount of CIT payable (as calculated in the final assessment) is too low.
During the current tax year, a provisional assessment can be issued on the basis of prior years’ taxable income or on an estimation provided by the taxpayer.
Payment of tax
The CIT assessed must be paid within two months of the date of the provisional or final assessment. Interest is payable on the CIT due. The interest is calculated from six months following the financial year. The minimum interest rate is 8%.
Refund of tax unduly levied
If a corporate taxpayer is entitled to a refund of Dutch CIT or WHT because the levy appeared to be in conflict with EU law, the Netherlands might be obligated to repay with interest for the period from the levy to the refund. The taxpayer must file a request at the Dutch tax authorities within six weeks after the refund.
Interest on late payment dividend WHT
Interest is calculated on late payments or refunds of Dutch dividend WHT.
Tax audit process
Corporate taxpayers might be subject to audits by tax inspectors. This forms part of the so-called vertical monitoring tasks of the national tax authorities. In recent years, there has been a tendency towards a more enhanced cooperation between tax authorities and taxpayers in the Netherlands (see Horizontal monitoring in this section below).
Statute of limitations
Under certain conditions, the tax administration can impose an additional assessment within five years from the year in which the tax debt originated (if the filing due date was extended on request, this period is added). In case of income from abroad, the period for additional assessment is extended to 12 years.
Advance pricing agreement (APA)/Advance tax ruling (ATR)
Taxpayers are able to obtain (legal) certainty concerning their CIT positions. They may request the Dutch tax authorities to conclude an APA with respect to the transfer pricing of controlled transactions. Taxpayers may also request the Dutch tax authorities to provide an ATR with respect to the CIT implications of a (contemplated) set of transactions.
On 1 July 2019, a new ruling policy for rulings with an international character (APA/ATR) took effect. The most important new elements are:
- In certain situations, no more pre-consultation will be allowed for, namely when:
- there is no sufficient relevant economic nexus
- saving of Dutch or foreign tax is the sole or decisive reason for the transaction, or
- a transaction takes place with a country that is on the Dutch list of low-tax jurisdictions.
- In principle, the tax authorities will make an effort to conclude APAs bilaterally, provided that a tax treaty has been concluded with the other country and that country is willing to cooperate in this respect.
If the taxpayer is willing, the Dutch tax authorities, in certain cases, shift their method from vertical monitoring to horizontal monitoring. Emphasis is placed on cooperation and on the responsibilities of the parties involved, instead of retrospective control. Horizontal monitoring is based on mutual trust, understanding, and transparency between the taxpayers and the Dutch tax authorities. It aims at reducing administrative burdens and providing legal certainty in advance. Taxpayers need to have a solid Tax Control Framework.
Topics of focus for tax authorities
The topics of focus for the Dutch tax authorities may vary.