From 1 January 2014, the eventual submission of a correct VAT return in the Netherlands will no longer prevent prosecution where the return has been filed late. Prior to 1 January 2014, the late, or non-filing of VAT returns was classified as a criminal offence under Dutch law. It was not possible for the Dutch authorities to prosecute where the taxpayer later made a complete and correct declaration.
This revision to the VAT legislation is particularly important to taxpayers who may previously have filed ‘nil’ VAT returns on time, correcting the return at a later date (i.e. when accurate figures become available). These taxpayers will now potentially be liable to prosecution.
Going forward, rather than submitting ‘nil’ VAT returns, taxpayers should submit estimated returns showing the VAT liability as accurately as possible. A correct and complete VAT return should be filed within six weeks of filing the estimated return.
This may require changes to taxpayer administrative procedures and an increase in compliance costs. However doing this, the taxpayer should not be liable to prosecution under the amended regulations.
