Government charged too much interest for corporate tax debts

Companies have paid too much interest on outstanding corporate tax debts since 2022, the Netherlands’ highest court has ruled, opening the way for refunds running into hundreds of millions of euros.

The Supreme Court said in its Friday ruling that the interest rate charged on late payments of corporate income tax was unjustifiably high. In 2022, companies were charged 8% interest, double the 4% rate applied to late payments of other taxes such as income tax or inheritance tax.

The court said it found no justification for treating corporate taxpayers differently and said it could identify no grounds for a higher rate that applied only to corporate income tax.

As a result, the court has lowered the interest rate for corporate tax debts to the general rate for all years since 2022. For 2025, for example, the rate falls from 9% to 6.5%.

The ministry of finance has estimated that companies could be entitled to around €850 million in refunds for the period from 2022 to 2025, but the Financieele Dagblad has put the figure at €1.3 billion. The ruling therefore represents a significant setback for the treasury.

Rian Waaijer of tax advisory firm KPMG Meijburg, which brought the case on behalf of a client, said she was “very satisfied” with the outcome.

“It is good that the Supreme Court has ruled there is no justification for charging a higher rate to corporate taxpayers,” she said.

A spokesman for the ministry of finance said the ruling would be studied to assess its full impact.

According to the Financieele Dagblad, more than 22,500 companies have registered objections to the higher tax rate since the case was first ruled on in the lower courts.