Clarification of regulation on penalty payments and compensation for costs of filing an objection | Deloitte Nederland

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Clarification of regulation on penalty payments and compensation for costs of filing an objection

The Supreme Court has delivered two judgments clarifying the scope of the regulation on penalty payments and the right to be compensated for the costs of filing an objection.

7 February 2018

Objection period

The General Administrative Law Act stipulates that the Tax Administration should decide on an objection within six weeks after the period for submitting a notice of objection has expired. There are, however, certain exceptions to this rule. One such exception applies when first a pro forma objection is filed by registered mail, in which case the objection period is suspended until a substantiation has been provided. The inspector can subsequently unilaterally extend the decision by a maximum of six weeks, while further extension is possible if all parties agree to this.

Penalty if a decision is not taken on time

If the Tax Administration ultimately fails to take a decision on the objection on time, the taxpayer can invoke the regulation on penalty payments due to a failure to take a decision on time. Based on this, the inspector forfeits a penalty that increases from EUR 20 to EUR 40 for each day he fails to do so, with a cap of EUR 1,260. This does require a prior notice of default, though. The inspector subsequently has another fourteen days to decide on the notice of objection.

Recently, the Supreme Court needed to rule on the question whether a penalty can be claimed in situations where an inspector has taken a decision within the term of the notice of objection, but has failed to do so with the appropriate care and has erroneously declared an objection to be inadmissible due to exceeding the filing period. According to the Supreme Court no penalty can be claimed in this case. A decision on an objection is still a decision, even if it is inaccurate.

The above does not affect a taxpayer’s right to dispute a decision on inadmissibility in court and to file a request for full payment of the legal costs. The Supreme Court’s case law shows this to be a possibility if the inspector is seriously negligent.

Compensation for the costs of filing an objection

The second key judgment discussed in this contribution refers to the limitation the Supreme Court has introduced as regards the right to a compensation for the costs of filing an objection. This case regarded an additional parking tax assessment. It had been imposed because an incorrect registration number had been filled in. Following the notice of objection that had been filed, the local tax officer had made it known that the objection would be met. Over the telephone the representative of the interested party and the local tax officer subsequently discussed a compensation for the costs of filing an objection. The local tax officer ultimately refused to grant it. According to the Amsterdam Court of Appeal he was incorrect in doing so. Still, because the decision on the objection had been already been taken by that time, the Court of Appeal did not grant an allowance for the discussion over the telephone. The Supreme Court has confirmed this judgment.


Sources: 

  • HR 26 januari 2018, 17/04365, ECLI:NL:HR:2018:94 
  • HR 26 januari 2018, 17/03083, ECLI:NL:HR:2018:96 
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