2022 Tax plan - Outline of procedural tax law and collection of taxes

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Outline of procedural tax law and collection of taxes

2022 Tax Plan - Budget Day (Prinsjesdag)

The following lists the measures proposed in the 2022 Tax Plan in respect of procedural tax law, collection of taxes and supplementary benefits.

23 September 2021

Outline of procedural tax law and collection of taxes

Dutch version

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Corina van Lindonk, Aart Nolten and Eddo Hageman discussed the most noticeable measures of Tax Plan 2022.

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Interest on tax

Since 1 October 2020, all tax types to which the interest on tax regulation applies, so including corporate income tax assessments, have been subject to a 4% rate. It has since become clear that the latter relaxation will not be continued after 31 December 2021. The State Secretary for Finance has sent the House of Representatives a letter stating that the interest on tax for corporate income tax assessments will be raised to an 8% rate again, effective from 1 January 2022.

Compensation in cases of hardship

A separate bill has been included to provide for situations of hardship in which groups of citizens may find themselves due to actions of the Tax Administration. One example is a situation in which the Tax Administration wrongfully refuses to cooperate with an amicable debt restructuring arrangement and citizens are faced with coercive debt collection. The government considers it desirable to grant compensation in such cases, to remove or alleviate the suffering caused. The bill provides a statutory basis for this.

The regulation means that an Order in Council can designate cases that qualify for compensation. These must be situations in which an unjustified act or omission on the part of the inspector or collector has put citizens in a difficult position and the financial and other consequences should not be for their account. The regulation’s scope is broad because so far exactly what situations are involved is unknown. Both civil and administrative law already offer possibilities to claim compensation, but according to the government this does not always offer solace.

The Tax Administration usually needs to have the necessary information before it can grant an appropriate compensation. However, requesting this information can be an extra burden for the citizens affected and their plight needs to be alleviated to some extent. So, it is proposed that the Tax Administration can request this information directly from the authorities involved. In the aforementioned example of amicable debt restructuring this could involve information from debt counsellors or from the municipality.

Monthly data provision child care centres

Childcare benefits are paid through an advance payment system, which may result in the amount initially paid being too high and part of this amount being recovered. This system led to the childcare benefits affair, leaving parents to face very high recovery amounts. To prevent this from happening again in the future, it is proposed to have childcare centres now regularly send data to the Tax Administration. This will allow for earlier detection of whether the amount paid out exceeds the amount the parents are actually entitled to. From now on, childcare centres will have to send data on the use of childcare to the Tax Administration at their own initiative every month, whereas previously this data was sent every year and at the request of the Tax Administration. While this system will not fully prevent recoveries, it will provide for their earlier detection, reducing the amounts to be recovered.

Delegation provision for support to persons entitled to supplementary benefits

The government considers it important to make it easier for persons entitled to benefits to be able to exercise their rights and comply with their obligations. To this end, the Improving the Enforceability of Benefits Act provides for rules to be adopted to remove obstacles in this respect. The power to determine these rules is transferred to the competent minister, enabling a quicker response to changes than would be the case if this were written into law. Under this delegation provision a regulation will be introduced effective from 1 January 2022, to ensure that the government reimburses costs for, inter alia, privacy protection to parties that offer free help to persons entitled to benefits.

Housing benefit if the rent limit for housing allocation is exceeded

At the moment, if the rent has exceeded the cap on the rent limit for housing allocation, the right to housing benefit continues to exist if, in the month before the rent limit for housing allocation is exceeded, there was a right to housing benefit. Situations may arise though, in which the rent limit for housing allocation is exceeded without there being any right to housing benefit in the month before the limit is exceeded, e.g., because the income or assets had been too high at that exact moment. If income and assets once again meet the requirements for a housing benefit, the right to housing benefit because the rent is too high will have lapsed. The legislator wants to help these tenants by cancelling the requirement that a right to housing benefit must exist in the month before the rent limit for housing allocation is exceeded. Instead, a requirement will be introduced according to which tenants must have previously received a housing benefit for the house involved, without a time limit.

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