Dutch tax office to tighten checks after €6.7m DigiD fraud

The Dutch tax office will tighten the rules for processing income tax returns after uncovering a €6.7 million fraud scheme that used DigiDs issued to Bulgarian nationals who are not residents, junior finance minister Eelco Eerenberg has told parliament.

The scheme involved using tax returns, refund requests and objection procedures filed with fake wage costs and inflated deductions to generate refunds, broadcaster NOS and the Telegraaf reported.

The government expects to recover around €2.3 million from frozen accounts; the remaining €4.4 million is probably lost, according to the reports.

Suspicious patterns were flagged by a bank that had noticed accounts being opened solely to receive tax refunds and emptied almost immediately. The tax office then matched that against income tax returns it had separately identified since late last year as filed in similar ways.

Non-residents at the counter

A second warning flag came from Logius, the government agency that runs the DigiD digital identity system. Logius told the Belastingdienst that local authorities with counters for the registration of non-residents had seen a sharp rise in DigiD applications from groups of Bulgarian citizens, escorted to the counter each time by the same intermediaries.

A sample survey matched around 400 of the citizen service numbers (BSN) issued through these counters to returns the tax office had already flagged.

According to Eerenberg, the intermediaries paid the applicants, booked the counter appointments and organised transport. The applicants themselves, the minister said, appeared to be unaware of what a DigiD was or what could be done with it. The majority gave a foreign residential address when they registered.

Cabinet response

The cabinet is investigating a tightening of the selection rules for income tax returns, Eerenberg said, and the tax office has already stopped future payments to people linked to these financial patterns.

The exposure may grow: in the same letter, the minister flagged that the welfare benefits system and VAT collection may also be affected, with further research under way.

The case is similar to a 2013 fraud case, in which Bulgarian crime gangs registered people at fake Dutch addresses to claim healthcare and housing benefits.

The fiscal investigation service FIOD has been pursuing other DigiD-based schemes. In July 2024, a man from Dordrecht was arrested over claims that he had used the DigiDs of some 300 mainly Bulgarian families to apply for around €4.9 million in childcare benefits.