Deferral of tax payments

Deferral of tax payments for entrepreneurs & reduction of tax interest

Last updated: 8 June 2021

Entrepreneurs (including legal entities) may receive a special tax payment extension for income tax, corporate tax, sales tax (BTW) and payroll tax. Besides it is possible to apply for payment extension for several other taxes and duties, such as: excise duty, landlord levy, environmental taxes, insurance tax and betting and lottery tax. The conditions for applying for deferral of payment have been relaxed due to the corona crisis.

Any entrepreneur who has run into financial problems as a result of the corona crisis is eligible for deferral of his tax debt. Postponement can be requested after a tax return has been filed and a (supplementary) assessment has been received.

Entrepreneurs who already applied for an extension of their special tax payment extension do not have to undertake action, the postponement will be automatically extended until 1 July 2021. Entrepreneurs who applied for, and received, a special tax payment extension, but haven’t yet applied for an additional extension could apply until 30 June 2021; on condition that the extension is for an amount below €20,000.

If an application for a special tax payment extension has not been made, an entrepreneur can still apply until 30 June 2021. However, the special tax payment extension will be awarded until 1 July 2021 at the latest if the application is made after 1 April 2021.

If an entrepreneur received deferral of taxation, he will receive a proposal from the Dutch Tax Authorities considering a payment arrangement. Starting on 1 October 2021, the outstanding tax debt will have to be repaid according to a 60-month payment plan. Earlier repayment is also possible.

Recovery interest
If you do not pay an assessment on time, you normally have to pay 4% recovery interest from the moment the payment term has expired. As of 23 March 2020, the tax authorities did temporarily reduce the recovery interest from 4% to 0.01%. This applies not only to a tax debt for which special deferral of payment is requested, but to all tax debts. The recovery interest is reduced until 31 December 2021. In the period of 1 January 2022 – 31 December 2023 the recovery interest rate will be increased to 4% in stages.

Tax interest
The tax authorities charge tax interest if they were not able to determine a tax assessment on time, for example because a tax return was filed too late or not for the correct amount. Normally, the tax interest is 8% for corporate tax and 4% for other taxes.

The tax authorities have temporarily reduced the tax interest to 0.01%. This applied to all taxes subject to tax interest. The temporary reduction of the tax interest was in effect from 1 June 2020 up to 1 October 2020, except for personal income tax. For personal income tax, the reduction was in effect from 1 July 2020 up to 1 October 2020.

As of 1 October 2020 the tax interest is 4% for all taxes, this includes the tax interest rate for corporate tax.

Source: Corona crisis: tax payment extension ad repaymentsOnline application for deferral of payment (Dutch only) | Tax interest (Dutch only) | Publication date: 29 March 2020

Do you expect a lower profit due to the corona outbreak? And do you now pay a provisional assessment for income tax or corporate tax? Then you can change your provisional assessment so that you immediately pay less tax. Reduce your estimated income for this.

READ MORE

WANT TO CONTACT US?

In case of questions, you can contact your current adviser. Do you not have an adviser (yet)? Call us at: +31 88 089 90 00