What is the relevant legislation relating to tax administration and controversies? Other than legislation, are there other binding rules for taxpayers and the tax authority?

The relevant legislation is enforced by the Dutch Revenue Service (DRS) and the Dutch tax judiciary. The relevant legislation is found in:

  • the Dutch Constitution, which requires all taxes to be levied by statute (principle of legality);
  • the General Administrative Law Act (GALA) and General Taxes Act (GTA), which deal with the procedure for the assessment of taxes and access to the Dutch tax judiciary. In this respect, the GTA takes precedence over the GALA as the GTA functions as a lex specialis in relation to the GALA;
  • various specific statutes on (corporate) income tax, wage and dividend withholding tax as well as other taxes; and
  • the Collection of Taxes Act, which deals with the collection of Dutch taxes, including secondary liability for Dutch taxes.

Beyond legislation, rules governing the assessment and collection of Dutch taxes are found in:

  • multilateral and unilateral treaties, notably double taxation agreements;
  • EU law instruments, including directives, regulations and case law of the Court of Justice of the European Union (CJEU);
  • case law of the Dutch tax judiciary, specifically from district courts, appellate courts and the Supreme Court of the Netherlands; and
  • administrative guidance from the DRS, which is (in contrast to the preceding instruments) not binding on a Dutch taxpayer or withholding agent but only on the DRS.
Relevant authority

What is the relevant tax authority and how is it organised?

The DRS forms part of the Ministry of Finance and falls under the responsibility of the Secretary of Finance. The Secretary of Finance appoints the directors responsible for the management of the DRS. The DRS is divided into the following divisions:

  • DRS Customs;
  • DRS Tax Intelligence and Investigation Service;
  • DRS for income-based allowances;
  • DRS for individuals;
  • DRS for SMEs;
  • DRS for MNEs;
  • DRS Central Administration Processes;
  • DRS for client interaction and services; and
  • DRS for provision of information.

The DRS is geographically organised. The place of the economic activity of the taxpayer determines which local DRS office has authority. Each region has one or more local DRS offices that are open to taxpayers. Also, specific expertise within the DRS is geographically concentrated.


Compliance with tax laws

How does the tax authority verify compliance with the tax laws and ensure timely payment of taxes? What is the typical procedure for the tax authority to review a tax return and how long does the review last?

Duration of a review depends on the type of tax, the type of taxpayer and the complexity of the return. For practical reasons, the DRS does not scrutinise each tax return submitted. Based on a risk analysis, only a (relatively) small number of tax returns are scrutinised. Each year the DRS publishes the number of tax returns that have been reviewed and the number of tax audits conducted. The DRS can avail itself of several measures to scrutinise a tax return, including:

  • A tax audit: usually an audit commences with a letter from the DRS to the taxpayer in which the audit is announced. The taxpayer and the DRS may agree in advance on the scope, duration and the officials involved in the audit. A tax audit is labour intensive and its duration varies on a case-by-case basis. Therefore, tax audits usually only take place where there are indications of non-compliance or fraud (see also question 11). Investigation methods employed are, among others, data comparison, statistical analysis, random checks and forensic accounting.
  • An exchange of information upon request by the DRS, either during its review of a tax return or before imposing a tax assessment. Although disclosure in most cases requires a prior request for information by the DRS, a taxpayer is, in a limited set of circumstances, required to spontaneously disclose information to the DRS.

An alternative to verifying compliance is ‘horizontal monitoring’. The DRS and certain taxpayers may enter into a horizontal monitoring covenant and develop an enhanced relationship in which they cooperate on the basis of mutual trust and understanding. As part of this enhanced relationship, the DRS and the taxpayer often include compliance provisions, such as a tax-control framework.

Types of taxpayer

Are different types of taxpayers subject to different reporting requirements? Can they be subjected to different types of review?

In principle, taxpayers are not subject to different reporting requirements. Obviously, the applicable reporting requirements differ depending on the type of Dutch tax involved, specifically, whether it is levied by self-assessment or on the basis of a tax return. For example, corporate entities are required to attach their annual report, including the balance sheet and profit and loss account, to their corporate income tax return.

Requesting information

What types of information may the tax authority request from taxpayers? Can the tax authority interview the taxpayer or the taxpayer’s employees? If so, are there any restrictions?

In accordance with the GTA, taxpayers are required, upon request by the DRS, to disclose all information that may be relevant for the levy of Dutch taxes in respect of them, as well as all books, documents, records and other data-carriers that may reveal facts that in turn may be relevant for the levy of Dutch taxes in respect of them. The disclosure obligation applies to individuals, entrepreneurs and corporate entities irrespective of whether they are domestic or foreign taxpayers. Employees are not obliged to provide the DRS with information about their employer. The DRS may not interview employees without permission of the taxpayer.

Available agency action

What actions may the agencies take if the taxpayer does not provide the required information?

Non-compliance with a request for disclosure by the DRS may result in:

  • the burden of proof being shifted from the DRS to the taxpayer and being increased, requiring the taxpayer to demonstrate convincingly that any subsequent tax assessment is incorrect. The burden of proof is shifted and increased only if the DRS has issued a decision holding the taxpayer to be non-compliant, and such decision has become irrevocable (due to expiry of the statutory period for filing an objection or the exhaustion of legal remedies against the decision);
  • a default or culpability penalty being imposed (see question 11); and
  • preliminary relief proceedings being initiated by the DRS before a civil court judge, where the DRS would ask for disclosure of the information requested subject to a judicially imposed penalty for non-compliance.
Protecting commercial information

How may taxpayers protect commercial information, including business secrets or professional advice, from disclosure? Is the tax authority subject to any restrictions concerning what it can do with the information disclosed?

In principle, a taxpayer is not allowed to refuse disclosure of information requested by the DRS by invoking any legal privilege. The taxpayer remains required to disclose such information, even if disclosure may result in a criminal charge being brought against him or her. However, persons exercising certain functions, for example, clergy, attorneys, physicians and civil law notaries, may refuse disclosure of information concerning the taxation of a third party pursuant to a professional duty of confidentiality. Coupled with the professional duty of confidentiality, these persons are accorded legal privilege. It is for them to determine which information falls under their legal privilege and which information is disclosed to the DRS. In turn, DRS officials are subject to a professional duty of confidentiality as regards all information that they receive through disclosure (see questions 18 and 22).

Limitation period for reviews

What limitation period applies to the review of tax returns?

The DRS may review a tax return within the statutory limitation period for issuance of a supplemental tax assessment for that return. This statutory limitation period is in principle five years for self-assessment taxes and return-based taxes, starting from the end of the calendar year to which the relevant tax return relates. However, the statutory limitation period is extended for return-based taxes from five years to 12 years if the supplemental tax assessment relates to income from foreign sources. This extension may, under certain circumstances, infringe EU law.

The five-year and 12-year statutory limitation periods for return-based taxes are extended further with the period for which the taxpayer has requested and received an extension for filing their tax return. The five-year statutory limitation period for self-assessment taxes is not so extended.

Furthermore, the statutory limitation period may be extended in cases where too little tax was initially levied by the DRS owing to an error that could have reasonably been known by the taxpayer. In this case, the extension is limited to a period of two years after the moment when, if no tax assessment was imposed, the decision was taken not to impose a tax assessment or, if a tax assessment was imposed, it was imposed.

Alternative dispute resolution

Describe any alternative dispute resolution (ADR) or settlement options available?

In principle, a conflict between the DRS and a taxpayer can only be settled through the general administrative law procedures. As an alternative dispute resolution mechanism, however, mediation may be available in cases where a taxpayer and the DRS have entered into a horizontal monitoring covenant (see question 3). Because such a covenant is a legal act under Dutch private law, the general administrative law procedure usually available to a taxpayer is not applicable in situations of horizontal monitoring. Mediation may be suitable if conflicts arise in such situations.

Collecting overdue payments

How may the tax authority collect overdue tax payments following a tax review?

The DRS may collect any amount of Dutch taxes formally due mainly through two alternative methods. These methods do not differ depending on whether or not collection is sought following a tax review.

First, the DRS is authorised to use all the means available to a creditor under Dutch private law to collect Dutch taxes on the basis that the amount formally due represents a receivable of the DRS. For example, the DRS may attach a taxpayer’s property or, in a limited set of circumstances, pierce a taxpayer’s corporate veil. If a third party has curtailed the collection possibilities of the DRS, the DRS may even claim damages (in the amount of the Dutch taxes formally due) from the third party for having curtailed tax collection possibilities.

Second, the DRS has specific authorisation to collect Dutch taxes on the basis of the Collection of Taxes Act. This authorisation allows the DRS to more easily collect Dutch taxes than a regular creditor is able to do under Dutch private law, for example, by more easily attaching a taxpayer’s property. Also, this authorisation extends the collection possibilities of the DRS beyond those of a regular creditor, for example by holding the directors of a corporate entity secondarily liable for the amount of Dutch taxes due by this entity, or seizing property that is present on the taxpayer’s premises without belonging to the taxpayer.


In what circumstances may the tax authority impose penalties?

The DRS may impose an administrative penalty on a person who committed an offence under Dutch tax law. The DRS may impose a penalty on a taxpayer who:

  • failed to file, or to file on time, any tax return or to pay in full, or to pay on time, self-assessment taxes; or
  • failed to disclose information to the DRS that it is required to disclose (in each case, a default penalty).

In addition, the DRS may impose a penalty on a taxpayer or withholding agent who:

  • intentionally filed an incorrect or incomplete tax return;
  • intentionally or grossly negligently reported less than the amount of taxes formally due;
  • intentionally or grossly negligently failed to pay in full, or to pay on time, self-assessment taxes; or
  • intentionally or grossly negligently failed to disclose information to the DRS that it is required to disclose spontaneously (in each case a culpability penalty).

For a culpability penalty, the DRS has the burden of proof of demonstrating (by making a plausible case) that the taxpayer had a culpable state of mind at the time when it committed the offence. The requisite culpability involves intent or gross negligence.

Further, the DRS may impose a default or culpability penalty on a person who, while not being a taxpayer:

  • co-committed the offence with the taxpayer;
  • instigated or incited commission of the offence; or
  • (only in respect of a culpability penalty) acted as an accessory to or in commission of the offence.

How are penalties calculated?

The maximum amount of a default penalty is fixed and ranges from €50 to €5,278 (in 2019), depending on the specific offence committed. The amount actually imposed may be less as a result of mitigating circumstances, which the DRS is required to consider when imposing a default penalty. The amount of a culpability penalty is fixed as a percentage of the amount of Dutch taxes that are deficient as a consequence of the offender’s intent or gross negligence, with the maximum being 100 per cent. As a starting point, the DRS generally assesses a culpability penalty at 50 per cent for offences being committed intentionally and at 25 per cent for offences being committed grossly negligently.

What defences are available if penalties are imposed?

Generally speaking, four defences are available against default and culpability penalties. These penalties may not be imposed or may be mitigated in the case of:

  • a defensible position - a default penalty or culpability penalty is not imposed if the offence results from a position that the taxpayer has taken but that is defensible, on the basis of current case law and literature, to such an extent that the taxpayer could reasonably be considered to have acted in accordance with Dutch tax law;
  • absence of all guilt - a default penalty or culpability penalty is not imposed if an offence under Dutch tax law occurs while the taxpayer has taken all precautionary measures that could reasonably have been required in the case at hand to prevent this offence;
  • mitigating circumstances; or
  • voluntary disclosure (see question 20).
Collecting interest

In what circumstances may the tax authority collect interest and how is it calculated?

The DRS charges simple interest on the amount of underpaid taxes at an annual rate of 8 per cent for corporate income tax and 4 per cent for all other Dutch taxes (in 2019) during the period from the close of the relevant taxable year up to the date of the assessment for these taxes, with no interest accruing during the first six months.

In addition, the DRS charges simple interest on the amount of Dutch taxes for which the payment terms have lapsed, at an annual rate of 4 per cent for all Dutch taxes (in 2019) during the period from the lapse of the payment terms for a tax assessment up to the date of each payment, until the tax assessment is settled in full.

Criminal consequences

Are there criminal consequences that can arise as a result of a tax review? Are these different for different types of taxpayers?

A tax review may result in criminal consequences as a matter of general Dutch criminal law or Dutch tax criminal law. For purposes of Dutch tax criminal law, a taxpayer (regardless of being a business entity, individual or director) may be subject to (figures for 2019):

  • a maximum of six months’ imprisonment or a fine of up to €8,300 for the intentional failure to disclose information, to maintain books and records or to cooperate with a review by the DRS, or for only doing so incorrectly or incompletely;
  • a maximum of four years’ imprisonment or a fine of up to €20,750 (or, if higher, the amount of underpaid Dutch taxes) for the intentional failure to file a Dutch tax return on time or to correctly and completely disclose information to the DRS; or
  • a maximum of six years’ imprisonment or a fine of up to €83,000 (or, if higher, the amount of underpaid Dutch taxes) for the intentional filing of an incorrect or incomplete Dutch tax return or forgery of its books and records.

Further, a taxpayer who committed an offence under Dutch tax criminal law may be subject to a criminal penalty in respect of, for example, forgery or money laundering if the offence under Dutch tax criminal law is considered separate and distinct from the offence under general Dutch criminal law. The criminal penalty for forgery of documents is a maximum of six years’ imprisonment or a fine of up to €83,000 (in 2019). Subject to aggravating and mitigating circumstances, the criminal penalty for money laundering is a maximum of six years’ imprisonment or a fine of up to €83,000 (in 2019).

Enforcement record

What is the recent enforcement record of the authorities?

Subject to limited exceptions, the DRS is disallowed from disclosing to any other person information that it has obtained as a result of, or in connection with, the enforcement of Dutch tax law, beyond what is necessary for the proper assessment and collection of Dutch taxes. Accordingly, the DRS’s enforcement record is not available publicly.

Third parties and other authorities

Cooperation with other authorities

Can a tax authority involve or investigate third parties as part of the authority’s review of a taxpayer’s returns?

The DRS may investigate certain third parties as part of its review of a taxpayer’s affairs. These third parties include Dutch resident corporate entities, Dutch resident individuals who carry on a business enterprise and Dutch resident individuals who are withholding agents for Dutch taxes. Specifically, the DRS may require these third parties to disclose information relevant for a taxpayer’s Dutch tax position or relevant for Dutch taxes that these third parties have to withhold and remit. In this respect, non-compliance is subject to sanctions (see question 6).

Does the tax authority cooperate with other authorities within the country? Does the tax authority cooperate with the tax authorities in other countries?

Dutch government authorities are required, upon request from the DRS, to exchange information for purposes of the assessment and collection of Dutch taxes. Conversely, the DRS may disclose information to other Dutch government authorities to the extent necessary for the proper performance of such government authority’s duty.

At the international level, the Netherlands has concluded tax information exchange agreements, which typically allow for exchange of information upon request, with approximately 30 countries worldwide (as of 2019). In addition, the Netherlands has concluded comprehensive double taxation agreements, which include (with some variations) the OECD Model Treaty standard for exchange of information, with approximately 100 countries worldwide (as of 2019). In addition, the Netherlands is in the process of incorporating spontaneous and automatic information exchange in its other bilateral instruments.

At the EU level, the Netherlands has implemented spontaneous and mandatory automatic exchange of information with other EU member states pursuant to Directive 2011/16/EU. The spontaneous exchange of information is particularly in regard to transfer pricing information and artificial profit shifting, while the mandatory automatic exchange of information extends to employment income, pensions and immovable property.

Special procedures

Voluntary disclosure and amnesties

Do any special procedures apply in cases of financial or other hardship, for example when a taxpayer is bankrupt?

Under Dutch tax law, there are no special procedures available in cases of financial or other hardship. However, financial hardship, for example, a taxpayer’s bankruptcy, may mitigate a culpability or default penalty (in relation to either reduced culpability or disproportionality to the seriousness of the offence). Further, the DRS may decide to waive payment of a tax assessment in exceptional cases of financial hardship.

Are there any voluntary disclosure or amnesty programmes?

As of 1 January 2018, the Netherlands no longer has a voluntary disclosure programme for taxpayers to avoid a culpability penalty being imposed for undisclosed taxable income from savings and investments abroad. However, voluntary disclosure is still seen as a mitigating circumstance that results in a culpability penalty being imposed at a reduced rate.

Rights of taxpayers

Rules protecting taxpayers

What rules are in place to protect taxpayers?

Various statutes protect the position of Dutch taxpayers (see also question 1). The Dutch Constitution provides that tax may be levied only pursuant to statute. The Dutch Constitution prohibits the Dutch tax judiciary from reviewing the constitutionality of Acts of parliament. The tax judiciary is, however, obliged to assess whether statutory rules are compatible with international treaties. As a result, taxpayers can invoke the rights derived from human rights conventions, for instance, if a fine has been imposed. Furthermore, the taxpayer may refer to the case law of the CJEU and the Charter of the EU in a case where EU law is applied.

Substantive Dutch tax law is found in specific statutes, such as statutes on (corporate) income tax, wage tax and dividend withholding tax. The GALA codifies rules that apply to Dutch administrative law in general, also pertaining to the protection of taxpayer’s rights. The GTA contains a considerable number of additional provisions. It sets out the manner in which tax can be levied and provides taxpayers with the means to object to the infringement of their rights. The Collection of Taxes Act contains provisions on possible defences against collection measures.

Taxpayers’ rights are also found in decrees of the Ministry of Finance. For example, the Administrative Penalties Decree contains instructions to the DRS as regards the imposition of fines. Taxpayers can invoke such a decree as if it were a rule of law. In addition, case law has developed various principles of proper administration. The DRS has to apply these principles and taxpayers may invoke them. Examples of these principles are the principle of legitimate expectations, the fair play principle, the principle of due care and the principle of legal certainty. A few of these principles are included in the GALA.

Requesting information

How can taxpayers obtain information from the tax authority? What information can taxpayers request?

The GTA subjects DRS officials to a professional duty of confidentiality as regards a person’s taxes and tax position. This duty applies to all information that is found or communicated, and not only to information of a confidential nature. Of course, an exception is made for tax officials for the purpose of carrying out their task. According to case law, this duty does not prohibit disclosure to the person or the business of the taxpayer itself or to those acting on its instructions.

In addition, a taxpayer has a formal right to access its tax file when objecting to a tax assessment imposed, to hear the reasons of the DRS for imposing such an assessment and to be heard on the reasons for its objection against it. This right can be claimed before a court.

Tax authority governance

Is the tax authority subject to non-judicial oversight?

A taxpayer may file a complaint for having been treated discourteously by any DRS official. Such a complaint is filed with the superior of the relevant DRS official and subsequently with the National Ombudsman, which determines whether there has been discourteous treatment and publishes its findings in a publicly available report. In its report, the National Ombudsman may suggest improvements to the DRS but may not render legally binding decisions. Furthermore, the petitions committees of Parliament exercise non-judicial oversight in cases where the taxpayer believes strict application of Dutch tax law results in consequences not intended by the legislature, for example, individual hardship. The decisions of these petitions committees are published and are authoritative.

Court actions (describe trial court actions in this section)

Competent courts

Which courts have jurisdiction to hear tax disputes?

Cases that concern the assessment and collection of Dutch taxes, including administrative penalties imposed and interest charged in respect of Dutch taxes, are heard by the district courts in the first instance. Appeals in these cases are heard by the appellate courts with the possibility of appeal to the Supreme Court.

Lodging a claim

How can tax disputes be brought before the courts?

Generally speaking, proceedings start with the Dutch taxpayer objecting in writing to a decision by the DRS against which an objection or appeal lies. Under Dutch tax law, an objection and appeal lies against:

  • tax assessments (ie, preliminary, final and supplemental assessments), including payment, withholding or self-assessment of Dutch taxes;
  • refund decisions by the DRS; and
  • other decisions (ie, administrative penalties or a decision on formation of a tax group) if Dutch tax law provides for objection and appeal to lie against such a decision.

The time limit for filing such an objection is six weeks after the decision objected to was taken. The DRS has to reconsider the tax assessment on the basis of the written objection, for example, whether it has been issued in accordance with substantive Dutch tax law and does not infringe any taxpayer’s rights as safeguarded by the GALA and GTA.

If the DRS denies the taxpayer’s objection wholly or partly, the taxpayer may lodge an appeal with the district court against the decision by the DRS. Again, the applicable time limit is six weeks after the decision appealed against was taken. If the taxpayer and DRS so agree, a taxpayer may bring the case directly before the district court (without filing a prior objection to the DRS). The district court reviews the contested decision by determining whether, as the DRS argues, the correct amount of tax has been levied and collected or, as the taxpayer argues, this amount has to be reduced. In this respect, no minimum thresholds exist. If the parties’ arguments do not bear upon the amount of tax levied or collected, they are not admitted to argue the case for lack of interest in the proceedings.

During the proceedings, the DRS and taxpayer may argue the facts of the case but also the application or interpretation of the relevant law. The district court is a court of fact. Upon appeal from the district court, the appellate court reconsiders every aspect of the case to the extent necessary, including questions of fact. There is, however, an essential difference between cassation before the Supreme Court and an ordinary appeal before the appellate court. The Supreme Court is required by statute to base its reasoning on the facts as established by the lower court. The Supreme Court may reverse the lower court’s decision on questions of law, including procedural tax law and requirements of due process.

Combination of claims

Can tax claims affecting multiple tax returns or taxpayers be brought together?

The district court, appellate court and Supreme Court may join separate tax claims concerning the same taxpayer if these tax claims involve the same or similar subject matter, either upon their initiative or upon request from the taxpayer or DRS. In addition, a taxpayer may bring tax claims involving multiple Dutch tax assessments or decisions together into a single procedure, provided that the taxpayer observes the time limit for filing the objection or appeal.

Pre-claim payments

Must the taxpayer pay the amounts in dispute into court before bringing a claim?

Generally speaking, the DRS allows the taxpayer an extension of the payment terms for a tax assessment once the taxpayer has filed an objection against the assessment. This extension is not renewed automatically if the taxpayer decides to lodge an appeal with the district court, appellate court or Supreme Court, but is renewed upon request from the taxpayer. Before renewing the extension, the DRS may require additional security from the taxpayer for payment of the tax assessment. Accordingly, the taxpayer in most cases is not required to pay the amount of a contested tax assessment to the DRS before the dispute is settled.

Cost recovery

To what extent can the costs of a dispute be recovered?

The taxpayer is required to pay filing fees upon appeal to the district court, appellate court or Supreme Court under penalty of the case being declared inadmissible. If the court sides with the taxpayer in part or in full, the DRS has to reimburse these fees. To the extent that the taxpayer has incurred travel expenses and legal fees, the court may likewise order the DRS to reimburse these expenses and fees according to a flat-rate system if the court sides with the taxpayer. If the court does not side with the taxpayer, each party bears its own expenses. The court may order at its discretion the DRS to reimburse the filing fees (but not the travel expenses or legal fees) even if it does not side with the taxpayer. In addition, the court may only order a taxpayer to reimburse the DRS’ legal expenses if it sides with the DRS and the taxpayer has engaged in manifestly unreasonable use of procedural law.

Third-party funding

Are there any restrictions on or rules relating to third-party funding or insurance for the costs of a tax dispute, including bringing a tax claim to court?

The Netherlands has not enacted any statutory restrictions or rules relating to third-party funding or insurance in respect of tax disputes.

Court decision maker

Who is the decision maker in the court? Is a jury trial available to hear tax disputes?

Complex cases heard by the district court and appellate court are decided by a three-judge panel. Other cases are decided by a single judge. All cases heard by the Supreme Court are decided by a panel of judges, consisting of three or five judges. Jury trial is not available.

Time frames

What are the usual time frames for tax trials?

Under Dutch tax law, the DRS has to render a decision on an objection within a period of six to 10 weeks. If this period lapses, the DRS is assumed to have rejected the objection, and that creates a possibility for appeal. Generally speaking, each appeal to the district court, appellate court and Supreme Court lasts for one and a half to two years. In case of undue delay by the DRS or tax judiciary, the taxpayer may be awarded compensation for supposed emotional damage.

Disclosure requirements

What are the requirements concerning disclosure or a duty to present information for trial?

Under Dutch tax law, there is no strict discovery process for a tax trial. Rather, a taxpayer has a right to access the case file as part of its objection against a tax assessment (see question 22). When lodging an appeal, the taxpayer is free to submit documents and other evidence to the district or appellate court. In turn, when lodging the defence to a taxpayer’s appeal, the DRS is obliged to file all documents and records that it has at its disposal and has considered in issuing the tax assessment at hand. In doing so, the DRS discloses its case file in full. Beyond this obligation, the DRS is free to exchange documents and other evidence during appeal, as is the taxpayer (see question 33).

Permitted evidence

What evidence is permitted in a tax trial?

According to the principle of freedom of evidence, the taxpayer and DRS may provide evidence by all legal means available. After the appeal is lodged and during the hearing, the district court and appellate court may make a request to hear testimony from witnesses, including from the taxpayer, DRS officials or experts. In each case, the witness has a duty to testify before the court. The district court and appellate court may request written evidence as well as a translation thereof when it is not formulated in Dutch.

Permitted representation

Who can represent taxpayers in a tax trial? Who represents the tax authority?

Taxpayers may represent themselves or be represented by anyone in proceedings, as legal representation is not mandatory in tax cases. Representation by a lawyer is mandatory only for oral arguments before the Supreme Court.

Generally, the DRS is represented by the involved tax inspector. In Supreme Court litigation, the State Secretary of Finance represents the DRS.

Publicity of proceedings

Are tax trial proceedings public?

The proceedings in tax cases are held behind closed doors and are not public, unless and insofar as the proceedings involve an administrative penalty.

Burden of proof

Who has the burden of proof in a tax trial?

According to the principle of a fair allocation of the burden of proof, the DRS has the onus to prove the facts increasing a taxpayer’s Dutch tax liability and the taxpayer to prove the facts decreasing this liability. The burden of proof may be shifted from the DRS to the taxpayer and increased if the taxpayer does not comply with certain disclosure or reporting requirements (see also question 6). The probative value of evidence is not fixed by statute but determined by the court.

Case management process

Describe the case management process for a tax trial.

The briefing process consists of an exchange of briefs in two rounds (usually taking up to four to eight weeks) and is followed by oral arguments (usually with a three-to-six-month delay). The parties may waive oral arguments, but this seldom happens.


Can a court decision be appealed? If so, on what basis?

Appeal lies with the district court, and subsequently with the appellate court and Supreme Court, against a decision by the DRS (see also question 25). In each case, the applicable time limit is six weeks after the contested decision is taken.


Recent developments

What are the current trends in enforcement of tax controversies? What are the current concerns of the authorities and taxpayers in relation to the enforcement and handling of tax controversies and are these likely to change? Are there proposals to change the relevant legislation or other rules?

Key developments of the past year39 What are the current trends in enforcement? What are the current concerns of the authorities and taxpayers? Are there proposals to change the relevant legislation or other rules?Preliminary Supreme Court ruling in tax cases

As of 1 January 2016, a district court or appellate court may request a preliminary ruling from the Supreme Court on general questions of Dutch tax law. The preliminary procedure is largely similar to the existing procedure for preliminary Supreme Court rulings in Dutch civil law cases and for preliminary rulings from the Court of Justice of the European Union (CJEU), with the main difference that the Supreme Court may decide not to issue a preliminary ruling if the question referred carries insufficient significance. If the Supreme Court issues a preliminary ruling, the referring court has to abide by it when deciding the case.

In 2017, the Supreme Court issued its first preliminary ruling. Since then, lower courts have used the preliminary procedure frequently. In 2019, multiple preliminary questions were raised to the Supreme Court regarding the right to a refund of Dutch dividend withholding tax for special collective investment funds, established in Germany, that are exempt from corporation and business tax in Germany. Both a district court on 26 February 2019 and an appellate court on 12 July 2019 raised questions in this regard. The Supreme Court is still processing these requests for a preliminary ruling.

Repeal of voluntary disclosure programme

Until 1 January 2018, there was a voluntary disclosure programme in place. Voluntary disclosure occurring in the grace period (ie, the first two years after intentionally or grossly negligently filing an incorrect or incomplete tax return) did not lead to a culpability penalty being imposed, while voluntary disclosure occurring after the grace period counted as a mitigating circumstance. The voluntary disclosure programme is repealed as of 1 January 2018. Since that date, voluntary disclosure is seen as a mitigating circumstance in all cases, which leads to a culpability penalty at a reduced rate. However, as the grace period is abolished, a taxpayer can no longer avoid the imposition of a culpability penalty.