Disclosure of negligence penalties imposed on fellow perpetrators who provided professional or business assistance
In the fight against tax evasion, the Cabinet deems it necessary to introduce a more detailed measure against those people who facilitate professional or business tax evasion and the deliberate (conditional) erroneous application for benefits. A tax negligence penalty for fellow perpetrators can be imposed against these practitioners. This appears to apply to a handful of cases each year. The legislative proposal ensures that negligence penalties imposed on professionals that have become irrevocable can be disclosed. This means that the public will be informed and can make better choices when selecting an adviser. The decision to impose the fine will be included in the publication, along with the type of offence, the amount of the fine, when the offence was committed, when the fine was imposed and also where the offence was committed. The information will be able to be viewed on the website of the Dutch Tax Authorities for a period of five years.
The professional shall be given the opportunity to put forward his/her opinion before a decision is made to make it public. Where the impact of disclosure on the professional’s private life is disproportionate, disclosure can be prevented.
Comment by PKF Wallast
It is important in this context to mention that this measure pertains to tax evasion and therefore not to tax avoidance. In other words, it involves situations in which professionals, in particular, are deemed to have known that they are acting contrary to the law. As the term implies, a fine for fellow perpetrators is imposed in addition to a fine for the taxpayer him/herself for committing the offence. If your adviser entices you to set up a tax structure which is outside the lines of the law, you may, in the first instance, suffer damage yourself and be subject to a fine or prosecution. The proposed “public pillory” provides the opportunity to select advisers in advance where you would run this risk based on past experience.
Changes to the voluntary disclosure scheme for income from substantial shareholdings
Last year, in 2018, it was announced that voluntary disclosure without penalty could be abolished for situations such as those that emerged in the Panama Papers. Specifically, the proposal currently being made is to eliminate voluntary disclosure without penalty for income from substantial interests. The differentiation between income from abroad and domestic income is also being removed.
Comment by PKF Wallast
Making a false declaration can be punished with the strongest category of tax fines: the tax negligence penalty. Where a taxpayer him/herself corrects the declaration or provides the information needed by the inspector in order to make a correct assessment, a fine may, under certain circumstances, be cancelled in full or in part. Over the past decade, the State Secretary for Finance twice provided a final opportunity to declare foreign savings and investments without a fine being imposed, or with a reduced fine. The door to disclose assets of this kind is now firmly closed. From next year, this may also be the case for domestic savings and investment and income from incorrectly declared substantial shareholdings domestically and abroad. Up until 31 December 2019, it is still possible, under certain circumstances, to declare significant positions and domestic box 3 assets that have not been previously declared or that have been declared incorrectly.
Abolition of corporate income tax payment discount
A proposal for 2021 was also announced in the accompanying letter to the Tax Plan 2020. The Cabinet is planning on abolishing the payment discount for companies that pay their assessment up front in one go. This measure is expected to yield an annual budgetary income of EUR 160 million, with account almost certainly being taken of the low interest rate and the government’s decreased interest in receiving the corporate income tax income earlier.