On November 7, 2024, the District Court of Noord-Nederland issued a decision (ECLI:NL:RBNNE:2024:4361) concerning the tax interest applied to a corporate income tax assessment. The case involved an 8% interest rate (the applicable rate at the time), referred to as the 'high' rate. The court ruled that this high interest rate violates the principle of proportionality. Consequently, the court determined that the tax interest rate should be reduced to 4%, aligning it with the rates applied to other tax categories, such as personal income tax and payroll tax.
Since the ruling, a substantial number of objections have been filed with the Dutch tax authorities against the high tax interest rate. To facilitate efficient handling, the State Secretary for Finance has designated this matter as a 'mass objection' procedure. This designation ensures uniform and streamlined processing of objections. As a result, once the Supreme Court renders its decision on the legal questions formulated by the State Secretary, all objections will be collectively processed and resolved in a single ruling.
The 'mass objection' procedure applies to the following tax categories:
- Corporate income tax and withholding tax: Tax interest calculated for periods after January 1, 2022;
- Solidarity contribution: Tax interest calculated for periods after January 1, 2022;
- Minimum tax 2024: Tax interest calculated for periods after January 1, 2024;
- Profit share (Mining Act): Tax interest calculated for periods after January 1, 2025.
The tax interest rate is periodically adjusted. For a complete overview of historical tax interest rates, please consult the website of the Dutch tax authorities [reference: Link]. Notably, the corporate income tax interest rate was 4% from October 1, 2020, to December 31, 2021. Since then, it has risen significantly, reaching 8% on January 1, 2022, and further increasing to 10% on January 1, 2024, where it remained in effect until December 31, 2024. As of January 1, 2025, the rate is reduced to 9%. For other tax categories, the highest tax interest rate was 7.5% in 2024 and has been adjusted to 6.5% as of January 1, 2025.
Participation in the mass objection procedure
To participate in the mass objection procedure, timely action is required. This entails filing objections within the prescribed deadlines against tax interest imposed on final assessments. Additionally, a separate request must be submitted to revise the tax interest applied on provisional assessments. It may also be advisable to file an objection concerning the interest rate applied to other taxes.
With thanks to Neriman Kaya
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
