Dutch tax legislation had created the possibility for taxpayers who had deliberately filed incorrect assessment in the past of going back on these earlier inconsistencies. In pursuance of the so-called ‘voluntary disclosure scheme’ errors could be remedied without subsequent criminal proceedings for tax fraud. However, the tax due plus interest on underpaid tax must still be paid. The statutory voluntary disclosure scheme has been stripped down ever more. At the moment it is no longer possible to voluntarily disclose income from a substantial interest (box 2) or foreign income and assets (box 3) without being subject to a penalty. For income in box 1 it is now only possible to go back on the assessments submitted in the past two years without being subject to a penalty. For the other years voluntary disclosure qualifies as an extenuating circumstance. It goes without saying that in a situation where an assessment is yet filed with the Dutch Tax Authorities regarding previous errors, it must be assessed what penalty would be appropriate and called for.

According to the statutory provisions, voluntary disclosure must take place before the taxpayer knows or should reasonably suspect that the inspector is or shall be familiar with the incorrectness or incompleteness. Or rather, when the Dutch Fiscal Intelligence and Investigation Service (FIOD) are on the doorstep, the tax authorities sent a letter of questions or sought telephone contact or an audit was announced, it is definitely too late.

In this respect it is important that many countries automatically exchange bank information with the Netherlands. Even more important is that foreign banks want to bid farewell to clients who did not file the bank balances. They require evidence that the assets are declared in the tax returns in the Netherlands.

Finally, tax consultants and accountants are subject to a notification requirement. Attorneys-at-law can rely on the attorney-client privilege and are not subject to this kind of notification requirement in respect of a discussion about income and/or assets that have not been declared yet.

In the recent past, De Bont Advocaten has assisted many taxpayers in voluntary disclosure proceedings where the moment of the ‘voluntary disclosure’ and subsequently the level of the penalty were at issue.