Supreme Court rules tax interest rate for CIT is too high
20/01/26
This article is last updated on 15 April 2026
The Dutch Supreme Court has held that the tax interest rate for corporate income tax (CIT) is excessive. In the case at hand, the (high) tax interest amounted to 8 percent but in subsequent years increased to as much as 10 percent. Tax interest is a levy payable by the taxpayer if the tax inspector issues an assessment that exceeds the (estimated) amount initially reported by the taxpayer. The Supreme Court has indicated that the tax interest for CIT must be set at the same rate as applies to other taxes, such as personal income tax. In this case, that rate was 4 percent. Tax interest is aligned with movements in the ECB policy rate and therefore varies from year to year. As from 2024, the differential between the tax interest previously calculated by the Dutch tax authorities for CIT purposes and the lower rate they must now apply pursuant to the Supreme Court’s judgement is 2.5 percentage points.
Objections to the level of tax interest have been designated as a mass objection procedure (‘massaalbezwaarprocedure’), with timely objections being put on hold and ultimately a collective decision being made on these objections. This procedure concerned tax interest on corporate income tax, withholding tax, solidarity contribution, minimum tax, and the profit share (a mining levy) in the period from 1 October 2020.
There were also cases on the question of whether the interest on tax for income tax and other taxes might be too high as well. The Supreme Court has determined that this interest is not excessive; not from 1 October 2020 onwards, and recently it ruled that the lower tax interest prior to that date was not too high either. The Supreme Court has not yet ruled on the higher tax interest in the period before 1 October 2020.
What does this mean for your organisation?
Is the tax interest on your company’s provisional or final corporate income tax assessment challenged in a timely manner? If so, this interest will, in principle, be reduced in light of this judgement. Please also closely monitor assessments issued in the coming months; the systems of the Dutch tax authorities may, for a period, continue to apply the original interest rates. In such cases, you must still file an objection to the tax interest if you wish to have it reduced. Please be aware that objecting to tax interest on provisional assessments follows a different procedure than for final assessments. Your adviser can assist in determining the procedurally correct route.
Have you filed an objection against the tax interest on other taxes, such as personal income tax? The Supreme Court has found that this interest is not excessive, and it will therefore not be reduced by this ruling.
What can I expect next?
After the lower court held in November 2024 that tax interest on corporate income tax was excessive, objections were filed against the level of tax interest on approximately 29,500 assessments, according to the Ministry of Finance. The State Secretary for Finance therefore decided in 2024 to consolidate all (timely) objections in a so-called mass objection procedure (massaalbezwaarprocedure). This means that the tax authorities have suspended all objections until the Supreme Court issued its ruling. The latter has now occurred.
The next step will be that the tax authorities will issue a single collective decision on all objections designated as mass objections. This decision was issued on 25 February 2026. Thereafter, tax inspectors must adjust the tax interest on all individual corporate income tax assessments to reflect the ruling. A period of six months from the collective decision on objections applies for these adjustments. Assessments on which tax interest has been charged for other taxes, such as personal income tax, do not need to be amended.
The procedure and the judgement
In November 2024, the District Court of Northern Netherlands held that the tax interest on corporate income tax (CIT) assessments was unreasonably high. For several years, the level of this interest has been determined by the Tax and Recovery Interest Decree (Besluit belasting- en invorderingsrente, Bbi). The court declared the Decree, on this point, invalid due to conflict with the principle of proportionality (evenredigheidsbeginsel), finding that the adverse consequences of a high interest rate were not proportionate to the objectives pursued by the legislator.
The State Secretary for Finance disagreed, and the matter was brought directly before the Supreme Court.
The Supreme Court now likewise holds that the 8 percent tax interest on CIT is invalid, because the relevant provision of the Bbi violates the principles of proportionality and equal treatment (gelijkheidsbeginsel). The Court reduces the rate to the rate applicable to other taxes, such as personal income tax (PIT). As a result, companies subject to CIT are no longer exposed to a heavier tax interest burden than other taxpayers.
Tax interest on “other taxes”
In view of the many objections also filed in respect of other taxes, the Supreme Court has additionally addressed whether the tax interest rate applicable to those taxes is likewise excessive. The Court assessed, inter alia, compliance with the principle of equal treatment, various non-discrimination prohibitions, and the principle of proportionality, and it considered the fact that the tax interest rate is subject to a minimum floor. All of these tests lead to the conclusion that the tax interest rate for other taxes can be maintained. Finally, the Supreme Court held that this conclusion also applies for the years from 2024 onwards, when the basis for determining the tax interest rate was changed. In doing so, the Supreme Court has resolved the legal questions raised in both this procedure and in the mass objection procedures concerning tax interest on CIT and on other taxes.
Tax Interest in the period before 1 October 2020
In the period prior to 1 October 2020, the rate of tax interest was not determined by the Tax and Recovery Interest Decree (Besluit belasting- en invorderingsrente, Bbi) but was instead stipulated in formal legislation. This period does not fall under the mass objection procedure or the Supreme Court ruling of 16 January 2026. Technically, a formal law – unlike a decree – cannot be assessed against unwritten principles of law. However, it may be assessed against legal principles established in, for example, treaties, such as the principle of proportionality and the principle of equal treatment as laid down in the European Convention on Human Rights (ECHR).
The Supreme Court has not yet ruled on the high tax interest, among others for CIT, for the period before 1 October 2020. However, the Hague Court of Appeal recently concluded that the higher tax interest for corporate income tax during the period from 1 July 2019 to 31 May 2020 does not meet the requirement of 'fair balance'. (Note: during the period from 1 June 2020 to 1 October 2020, the high and low tax interest rates – for a.o. CIT, respectively for a.o. personal income tax – were the same, amounting to just 0.01% due to the coronavirus crisis.) The Court therefore reduced the rate to the 'lower' tax interest percentage, as applied for, among others, personal income tax. It is expected that this matter will be brought before the Supreme Court.
For the lower interest rate (such as for personal income tax) in the period up to 1 October 2020, the Supreme Court ruled on 10 April 2026 that this can be maintained. The interest rate does not infringe Article 1 of the First Protocol to the ECHR and remains within the wide margin of appreciation of the legislator. For the lower tax interest rate, the Supreme Court applies the same reasoning for the period prior to 1 October 2020 as it did for the period from 1 October 2020 onwards in its judgement of 16 January 2026.
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