New rules for supplementary Dutch VAT returns

The new rule aims to encourage taxpayers to correct their VAT returns as soon as possible and to avoid penalties for late submissions. This rule serves as an incentive for taxpayers not to be passive when errors are detected. Yet, the current and new rules do not allow for omission penalties ('verzuimboetes') for not filing a supplementary VAT return within the eight week term. However, non-compliance with the eight-week term can result in an offense penalty ("vergrijpboete").

Even so, not every late supplementary VAT return will automatically lead to an offense penalty, because the DTA will still need to prove that the taxpayer acted with intent or gross negligence when not submitting a supplementary VAT return within eight weeks. When a taxpayer informs the DTA that it detected an error and is investigating its impact, doing everything which can reasonably be expected from him to file a supplementary VAT return as soon as possible, it will be difficult for the DTA to take the position that it acted with intent or gross negligence when submitting the supplementary VAT return after eight weeks. Moreover, the moment of identification of an error - and hence the starting date of the eight-week period - may not always be clear and may depend on the specific circumstances of each case.

Taxpayers are advised to review their VAT compliance procedures to see if they encounter any issues or uncertainties regarding the new rule. For taxpayers that apply a pro rata recovery percentage, it is important to note that an annual correction needs to be made in the final return of the year.  Throughout the year, the application of the preliminary pro rata cannot be considered an error under the new rules, so there is no need to correct the pro rata percentage within eight weeks of each VAT return. 

Your PwC indirect tax advisor is available for any questions or challenges that may arise in this respect.