The Deputy Minister of Finance is actively tracing bank accounts abroad that have not been declared. One of the means he is employing to achieve this is increasing the penalty for undeclared Box 3 income to a maximum of 300% from July 1, 2009. Taxpayers who made use of the Voluntary Disclosure Program before January 1, 2010 could do so without being penalized. From 2010, however, those making use of the voluntary disclosure scheme can face a 15% penalty.
Under tax law, penalties can be imposed with regard to personal income tax (among others) if a taxpayer deliberately submits a tax return that is too low or when an insufficient levy of tax is imputable to gross negligence or intent. These penalties can reach a maximum of 100% of the tax either not paid or underpaid. Since July 1, 2009, a maximum penalty of 300% can be imposed, but only on underpaid tax on income from savings and investments in Box 3.
Voluntary Disclosure Program
If a taxpayer still wishes to declare any income to the Dutch Revenue that has erroneously not been declared they can make use of the Voluntary Disclosure Program. Taxpayers providing full disclosure before they could reasonably suspect that the Dutch Revenue or the FIOD/ECD is on their trail must, of course, pay the tax owed with interest. Taxpayers making use of the Voluntary Disclosure Program before January 1, 2010, were, however, not penalized. From January 1, 2010 tax payers only have two years from the filing of a personal income tax, corporate income tax, or gift and inheritance tax return that is too low in which to provide full disclosure without being penalized.
A 15% fine for voluntary disclosure after 2 years from 2010
A new Dutch Revenue Administrative Penalties Decree states that the penalty accompanying use of the Voluntary Disclosure Program will be reduced to 15% of the underpaid tax if the taxpayer makes use of the program after two years of submitting a tax return that is too low. This means that the penalty for undeclared Box 3 income will be reduced to 5% of the statutory maximum. This still means that the penalty is 15% of the underpaid tax.
Supplementary assessment period
In matters concerning foreign savings, the Dutch Revenue can impose supplementary income tax assessments for up to 12 years retroactively on the undeclared interest from such bank accounts. The Voluntary Disclosure Program is, for that matter, valid for all undeclared domestic and foreign income, and is thus not solely applicable to foreign savings.