Tax office criticised for overestimating income for late payers

The Dutch tax office has been overcharging thousands of people who filed their tax returns late, according to a critical review by government inspectors.

Around 79,000 people were sent estimated tax bills in 2022 after they failed to submit an annual income tax return and did not respond to two reminders. They were also given a fine for non-submission, which is currently €469.

Of the 14,000 late payers who sent a tax return after being penalised, 90% had had their income overestimated, the government’s fiscal inspectorate found.

The average estimated bill for this group was €12,609, more than three times as high as the actual average bill of €3,958, and in 60% of cases the recipient had nothing to pay or was due a refund on their income tax.

In a letter to the finance ministry, the inspectorate for tax, supplements and customs urged the tax office to do more to estimate people’s income more accurately.

Long-term care

Excessively high estimates also have knock-on financial implications for many taxpayers, such as people who depend on long-term care and are required to pay a personal contribution based on their income.

Others may miss out on legal aid support because they are wrongly assumed to be above the threshold for state support, the inspectorate said.

The letter also pointed out that many people who fail to file a tax return do so because of incapacity or personal difficulties such as problems understanding Dutch, illness or being unable to obtain the relevant documents.

“Despite the efforts of the tax office to prevent people getting into difficulties, we noticed in our research that there is a group of people that the tax office is not reaching and does not have a good picture of,” it said.