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

The relevant legislation relating to tax administration and controversies 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;
  • the Tax Arbitration Act, which is the implementation of Directive 2017/1852/EU (Arbitration Directive) into Dutch law on international dispute resolution through mutual agreement procedures that may ultimately be sided by arbitration;
  • various specific statutes on (corporate) income tax, wage and (dividend and conditional interest and royalty) 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.


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

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

  • multilateral and unilateral treaties, notably double taxation agreements (including amendments pursuant to the Multilateral Instrument);
  • EU law instruments, including directives, regulations and case law of the Court of Justice of the European Union;
  • 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 State Secretary of Finance for Taxation and Dutch Revenue Service. The State Secretary of Finance for Taxation and Dutch Revenue Service appoints the directors responsible for the management of the DRS. The DRS comprises the following divisions:

  • DRS Tax Intelligence and Investigation Service;
  • DRS for Individuals, including a team High-Net-Worth Individuals (owning more than €25 million in savings, investments and substantial interest shares);
  • DRS for Small and Medium-sized Enterprises;
  • DRS for Large Enterprises;
  • DRS Central Administration Processes;
  • DRS for Client Interaction and Services; and
  • DRS for the Provision of Information.


The DRS is geographically organised. The place of 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. Specific expertise within the DRS is also geographically concentrated.

Apart from the DRS, the Ministry of Finance is also responsible for the department’s Customs and Income-based Allowances.


Verification of compliance with tax laws

How does the tax authority verify compliance with the tax laws? Does this vary for different taxpayers or taxes?

The Dutch Revenue Service (DRS) can verify compliance with the tax laws in various ways, including by way of:

  • Reviewing or scrutinising a specific tax return: for practical reasons, the DRS does not review and scrutinise each tax return submitted, but only a (relatively) small number based on a risk analysis. The DRS publishes specific topics that it will focus on in its review in a certain year. For 2023, the DRS will, for instance, focus on concealed assets, false self-employment, the business succession scheme and combating fraud.
  • 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. The 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, the taxpayer is, in a limited set of circumstances, required to spontaneously disclose information to the DRS.
  • ‘Horizontal monitoring’: the DRS and certain taxpayers may enter into a horizontal monitoring covenant and develop an enhanced and more transparent relationship in which they cooperate on the basis of mutual trust and understanding. As part of this enhanced and more transparent relationship, the DRS and the taxpayer often include compliance provisions, such as a tax-control framework. Horizontal monitoring is not available for individuals.


In addition to the above domestic possibilities, the DRS can make use of international exchange of information with foreign tax authorities and international joint tax audits in its efforts to verify compliance with the tax laws.

Verification by the DRS of a taxpayer’s compliance with tax laws is generally similar for all taxpayers. However, exceptions are possible two ways. A taxpayer may expect fewer reviews and (or) tax audits if horizontal monitoring is applied, if similar informal arrangements have been agreed upon with the DRS or if a formal advance tax ruling or advance pricing agreement is in place. A taxpayer may expect more or stricter reviews or tax audits, or both, if non-compliance by that taxpayer has been detected in the past or if it is active in a sector that is monitored by the DRS more strictly because of increased risks of non-compliance in that sector.

Tax return review procedure and limitation periods

What is the typical procedure for the tax authority to review a tax return and how long does the review last? What limitation periods apply?

The duration of a review by the DRS depends on the type of tax, the type of taxpayer and the complexity of the tax 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. In addition, the DRS publishes specific topics that it will focus on in its review.

The DRS should review a tax return for return-based taxes and impose a tax assessment within a period of three years, starting from the moment the tax liability arises or in certain cases the end of the period to which the relevant tax return relates. In the case of a new fact, a supplemental tax assessment may be imposed until five years have lapsed, starting from the moment the tax liability arises or in certain cases the end of the period to which the relevant tax return relates. This period is extended to 12 years if the supplemental tax assessment relates to income from foreign sources. These periods are extended further with the period for which the taxpayer has requested and received an extension for filing its tax return.

For self-assessment taxes, a supplemental tax assessment may be imposed until five years from the end of the calendar year to which the relevant tax return relates or in which the refund has been granted, which for certain real estate-related items is extended to 12 years. For self-assessment taxes, a new fact is not required to impose a supplemental tax assessment.

Further, the statutory limitation period may be extended in cases where too little tax was initially levied by the DRS due 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.

Tax authority requests for 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 General Taxes Act, 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 the permission of the taxpayer.

Taxpayer failure to provide information

What actions may the tax authority 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 the 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; 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. This duty of confidentiality however does not prohibit the DRS from exchanging information with the taxpayer itself, other domestic authorities and foreign tax authorities. Any information received from foreign tax authorities through exchange of information is also covered under the duty of confidentiality of the DRS and any information shared with foreign tax authorities should be protected under the laws of the country of the receiving tax authority.

Limitation period for reviews

What limitation period applies to the review of tax returns?

Alternative dispute resolution

What (if any) alternative dispute resolution (ADR) or settlement options are available?

In principle, a conflict between the DRS and a taxpayer will be settled through the general administrative law procedures. As an alternative dispute resolution mechanism, however, mediation may be available in two cases. First, mediation is available in cases where a taxpayer and the DRS have entered into a horizontal monitoring covenant. 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 and therefore mediation may be suitable if conflicts arise in such situations. Second, mediation might be helpful in cases where the dispute between the DRS and the taxpayer is not strictly legal, but also relational (eg, a dispute that not only concerns the interpretation of tax law, but also the way the DRS has treated a taxpayer in a tax audit). The outcome of a successful mediation will be laid down in a settlement agreement between the DRS and the taxpayer. In addition, in the case of international disputes and depending on the facts and circumstances, international arbitration may be possible under the Tax Arbitration Act (which is the implementation of the Arbitration Directive into Dutch law), tax treaties that provide for an arbitration possibility (which may also be possible through the Multilateral Instrument (MLI) or the EU Arbitration Treaty.

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 certain defined Dutch taxes due by this entity, or seizing property that is present on the taxpayer’s premises without belonging to the taxpayer.

The DRS may freely opt for whichever method it deems most appropriate for collection purposes. It may, however, only switch from one method to the other if the collection interests outweigh the interests of the taxpayer and any third parties.

Penalties - scope of application

How are penalties calculated?

What defences are available if penalties are imposed?

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, who could also be professional advisers such as tax advisers, lawyers, civil law notaries or accountants;
  • instigated or incited the commission of the offence; or
  • (only in respect of a culpability penalty) acted as an accessory to or in the commission of the offence.


Culpability penalties imposed on professional advisers may be published on the website of the DRS, including the name of the adviser, the offence committed and the amount of the penalty. This information will remain available for a period of five years. Culpability penalties imposed on taxpayers and default penalties will not be published.

Penalties – calculation

How are penalties calculated?

The maximum amount of a default penalty is fixed and ranges from €136 to €5,514 (in 2023), 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 and 300 per cent if it relates to income from savings and investments. 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.

Penalties – defences

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. A defensible position can only concern the interpretation of tax law or the legal qualification of the facts;
  • 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 (although the possibilities in this respect have been limited over the past few years as a result of which voluntary disclosure is no longer possible in respect of income from substantial interest shares and income from savings and investments).
Collecting and calculating 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 6 per cent for all other Dutch taxes (as at 1 July 2023). The period over which such interest is calculated depends on the type of tax (eg, corporate income tax or personal income tax).

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 light of the covid-19 pandemic temporarily reduced to 3 per cent for the period 1 July 2023 to 31 December 2023) 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

Can criminal consequences arise as a result of tax non-compliance? Are these different for different types of taxpayers?

Tax non-compliance may result in criminal consequences as a matter of general Dutch criminal law or Dutch tax criminal law. For the purposes of Dutch tax criminal law, a taxpayer (regardless of being a business entity, individual or director) may be subject to (figures for 2023):

  • a maximum of six months’ imprisonment or a fine of up to €9,000 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 €22,500 (or, if higher, up to 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 €90,000 (or, if higher, up to the amount of underpaid Dutch taxes and for certain underpaid taxes up to three times such amount) for the intentional filing of an incorrect or incomplete Dutch tax return or forgery of its books and records.


Further, a taxpayer who has 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 €90,000 (in 2023). 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 €90,000 (in 2023).

Tax avoidance

Are there specific rules or provisions regarding perceived tax avoidance?

The Netherlands tries to tackle tax avoidance in various ways, including through:

  • Statutory provisions. Such statutory provisions include a general anti-avoidance rule (GAAR) in the Dutch Corporate Income Tax Act and the Dutch Dividend Withholding Tax Act, which function as an implementation of the GAAR in the EU Parent-Subsidiary Directive, as well as specific provisions on, for example, restriction of interest deduction.
  • A general abuse of law doctrine known as fraus legis. The abuse of law doctrine, developed in case law, serves to tackle all other types of tax avoidance that are not specifically prohibited by statutory provisions. The abuse of law doctrine makes it possible to ignore or re-characterise transactions if these are predominantly tax and not commercially driven and breach of a specific statutory provision or breach of the objective and purpose of the law. As a result, a non-taxable constellation of facts may be ignored and substituted by a taxable constellation of facts. The DRS is of the opinion that the abuse of law doctrine is sufficient to cover the GAAR in the EU Anti-Tax Avoidance Directives and that no further implementation of such GAAR in Dutch statutory law is necessary.
  • The inclusion of a principle purpose test in double taxation treaties, either directly upon negotiations with the relevant treaty partner or through the MLI.
  • The introduction of a conditional withholding tax on interest and royalty payments to related entities in listed low-tax jurisdictions and in certain abusive or hybrid situations, which is levied under the Dutch Withholding Tax Act 2021. From 1 January 2024, a similar conditional withholding tax on dividend payments will enter into force.
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’ enforcement record is not available publicly.

Third parties and other authorities

Third-party involvement with tax reviews

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

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

The Dutch Revenue Service (DRS) may involve 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 addition, certain parties (eg, financial institutions), have an obligation to automatically disclose information to the tax authorities. Non-compliance with these disclosure obligations is subject to sanctions.

Cooperation with other authorities

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. For instance, the DRS provides information to the Social Insurance Bank that requires information for its responsibilities in respect of state pensions.

At the international level, the Netherlands has concluded tax information exchange agreements, which typically allow for the exchange of information upon request, with approximately 30 countries worldwide (as at 2023). The Netherlands has also 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 at 2023). In addition, the Netherlands has incorporated spontaneous and automatic information exchange in many of its other bilateral instruments. Further, the Netherlands is a party to and has ratified the Convention on Mutual Administrative Assistance in Tax Matters of the OECD and the Council of Europe, which contains a possibility to exchange information upon request, spontaneously or automatically, relating to taxes on income, profits, capital gains or net wealth, compulsory social security contributions and taxes in other categories such as for instance estate, inheritance or gift taxes, taxes on immovable property and value added tax.

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, as amended by Directive 2018/822/EU (DAC6) and as further amended by Council Directive (EU) 2021/514 (DAC7). The spontaneous exchange of information under DAC6 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. DAC6 transactions have to be reported within 30 days from the date on which the arrangement is ready for implementation or the start of the implementation. DAC7 regards exchange of information in respect of digital platforms and the first reporting obligations related to 2023.

Financial or other hardship

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 Dutch Revenue Service (DRS) may decide to waive payment of a tax assessment in exceptional cases of financial hardship.

Are there any voluntary disclosure or amnesty programmes?

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 nor for taxable income from substantial interest shares. However, voluntary disclosure is still seen as a mitigating circumstance that results in a culpability penalty being imposed at a reduced rate, provided the disclosure is made on time (namely, before the taxpayer has any indication the DRS may investigate the taxpayer’s income).

Voluntary disclosure for other (parts of) self-assessment taxes and return-based taxes to avoid a penalty is still possible, provided that a taxpayer is not and should not have been aware that the DRS is or will be familiar with the incorrect or incomplete assessment or return. For return-based taxes, a period of two years applies in which no culpability penalty will be imposed and, after that period, voluntary disclosure is taken into account as a mitigating circumstance.

Rights of taxpayers

Rules protecting taxpayers

What rules are in place to protect taxpayers when dealing with the tax authority?

Various statutes protect the position of Dutch taxpayers. 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 such as the European Convention on Human Rights (ECHR) and the International Covenant on Civil and Political Rights (ICCPR). This includes, for example, the right to protection of property as laid down in article 1 of the First Protocol to the ECHR and the non-discrimination provisions as laid down in the ECHR and ICCPR. Further, the taxpayer may refer to the case law of the Court of Justice of the European Union and the Charter of the European Union 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 General Administrative Law Act (GALA) codifies rules that apply to Dutch administrative law in general, also pertaining to the protection of taxpayers’ rights. The General Taxes Act (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 Dutch Revenue Service (DRS) with regard to 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 must 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 from tax authority

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 regarding 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 tasks. 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 their 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.

Oversight of tax authority governance

Is the tax authority subject to non-judicial oversight?

A taxpayer may file a complaint about 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. Further, the petitions’ committees of parliament exercise non-judicial oversight in cases where the taxpayer believes the 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 proceedings

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 Dutch Supreme Court.

Lodging a claim

How can tax disputes be brought before the courts?

Proceedings generally start with the Dutch taxpayer objecting in writing to a decision by the Dutch Revenue Service (DRS) against which an objection or appeal lies. Under Dutch tax law, an objection and appeal lies against:

  • tax assessments (namely, preliminary, final and supplemental assessments), including payment, withholding or self-assessment of Dutch taxes;
  • refund decisions by the DRS; and
  • other decisions (namely, administrative penalties or a decision on the 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 General Administrative Law Act and the General Taxes Act.

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 must 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 the 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?

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.

The DRS does charge simple interest on the amount of Dutch taxes for which the payment terms have lapsed, even if an extension for payment is allowed, at an annual rate of 4 per cent for all Dutch taxes (in light of the covid-19 pandemic temporarily reduced to 3 per cent for the period 1 July 2023 to 31 December 2023) 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.

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 must 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. At its discretion, the court may order 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.

If no court decision is rendered within a reasonable period of time, the court may grant compensation on the basis of immaterial damages due to undue delay upon request of the taxpayer. The reasonable period for a court decision at the district court is two years from the moment an objection was filed with the DRS (six months for the DRS to handle the objection plus 18 months for the court to handle the appeal). The reasonable period for a court decision at the appellate court is two years from the moment the appeal was lodged, and at the Supreme Court again two years from the moment that appeal was lodged. If these periods have lapsed without the relevant court decision being rendered, compensation in a fixed amount of €500 per six months is granted, to be paid by the DRS or the state of the Netherlands depending on which party caused the delay.

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.

Availability of jury trials

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 hearings?

Under Dutch tax law, the DRS must in principle render a decision on an objection within a period of six weeks, which can be extended to 12 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 the case of undue delay by the DRS or the 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. 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.

Permitted evidence

What evidence is permitted in tax hearings?

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 hearings 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 tax hearings?

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 must 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. The probative value of evidence is not fixed by statute but determined by the court.

Case management process

What is the case management process for a tax hearing?

The briefing process consists of an exchange of briefs in two rounds (usually taking 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. The parties may, in principle, submit additional documents and a further explanation of arguments and facts with the relevant court until ultimately 10 days before the court session will take place, in a 10-day document.


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. In each case, the applicable time limit is six weeks after the contested decision is taken.

During an appeal with the district court and the appellate court, questions of facts as well as questions of tax law are subject of debate. During an appeal with the Supreme Court, the facts are no longer being debated and the Supreme Court will only review whether the decision of the appellate court was sufficiently motivated, is comprehensible and (or) if there has been a breach of law.

Update and trends

Key developments of the past year

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?

At the time of writing, the Dutch Revenue Service (DRS) seems to have a specific focus on transfer pricing issues, structures that involve a hybrid entity and restriction of tax deductions (based on statutory provisions as well as the unwritten fraus legis abuse-of-law concept). This is prompted by developments and initiatives at the international and EU levels, such as (the implementation of) the EU Anti-Tax Avoidance Directives, Directive 2018/822/EU (DAC6) and the OECD’s Base Erosion and Profit Shifting project. The new rules following these initiatives provide the DRS with new means and information to combat tax avoidance even more actively.

There is some concern in relation to the amount and the processing time of pending controversies in general. The Council for the Judiciary is working on this and is trying to reduce the processing time for controversies. In addition, tax legislation is becoming ever more complex, as well as following the rules that are being introduced to address the developments mentioned above. As it is expected that the DRS will continue to apply a strict policy and use all its efforts to combat tax avoidance going forward, it could well be that the number of tax controversies and the processing time will increase instead of decrease.


What emergency legislation, relief programmes and other initiatives specific to your practice area has your state implemented to address the pandemic? Have any existing government programmes, laws or regulations been amended to address these concerns? What best practices are advisable for clients?

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