Provisional Tax Assessment 2022 in the Netherlands
The week of 6 December 2021 is the start of the issuance of the provisional tax assessment for the year 2022. These provisional assessments are sent by the Dutch Tax Authorities (‘DTA’) to all taxpayers in the Netherlands in the month of December and January. The provisional tax assessment is based on the data received by the tax authority for the provisional tax assessment from the previous year (2021) or the final tax assessment from the 2 preceding years (2020). The tax authority takes the best estimate from the most recent data available to determine the provisional assessment.
Provisional Tax Assessment 2022 – a request for adjustment
The provisional tax assessment 2022 is based on the previous year’s information as mentioned above, however if the income or the taxable earnings is expected to change in 2022 or no longer the same as previous years, the current data should be sent to the tax authority as soon as possible. This is to avoid having to pay back the tax, in the case where the provisional assessment notifies a tax refund, while at the later stage the final assessment notifies the opposite. Therefore, the provisional assessment should be checked carefully whether the data or the financial information is still applicable for the year that relates.
At the later stage, at the end of the fiscal year, the actual tax returns should be filed to determine whether a tax payment or a tax refund is applied.
The provisional tax assessment may be paid in instalments. The number of the instalments is based on the outstanding tax payable, which needs to be calculated pro-rata for the remaining months after the assessment issuance date and should be paid-off by the end of the year on 31 December at the latest.
In the new payment arrangement, the tax authority makes the payment even more favourable for the taxpayers, which also applies for the tax refund. In this way the tax authority issues the provisional assessment for the taxpayers to check and to request adjustment in order to be more aligned with the actual income in the current year. This is to avoid paying more tax afterwards, and thereby less with the final assessment.
Filing of Tax returns
The taxpayers in the Netherlands are required to file a tax return annually. The invitation to file the tax return will be sent separately by the tax authority. For the Corporate taxpayers, the filing of the annual tax return is generally due at five months after the end of the company’s financial year. The due date may be extended upon request and under certain circumstances.
Usually, the filed data in the tax returns are based on the final financial information, though the preliminary figures or drafts are accepted before the final are available. For example in the case of a corporate, where the annual accounts are available but it has not been approved in the annual general meeting.
The final tax assessment should be issued by DTA within three years following the financial year it concerns. This period may be extended along with the time of the extension for filing the tax return, upon request.
Covid-19 and Tax delay
Since the Covid-19 outbreak in the Netherlands, March 2020, the Dutch Government has taken several measurements to minimize or to ease the consequences of the crisis. One of them is the immediate rescheduling of tax payment. The delay or the rescheduling of the tax payment (upon request) has been extended several times.
For the Corporate income tax, the last measure on this tax delay was expired on 1 October 2021, which consequently the deferred tax should be paid as of this date. The start date for the payment is on 1 October 2022 with 60 months instalments. However, upon request the Dutch Government is open to re-arrange this repayment scheme, if necessary.
The Dutch Government has recently announced that the special tax deferral due to corona crisis is extended and this extension applies until 1 February 2022. It means that all taxes with a final payment date before 1 February 2022 do not have to be paid yet.
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