The Dutch Supreme Court has ruled that the higher 8% tax interest rate applied to corporate taxpayers is unlawful, finding it disproportionately burdens businesses and violates principles of equality and proportionality. As a result, the rate must be reduced to the standard 4% applied to other taxpayers.
The Dutch Supreme Court ruled on 16 January 2026 that the higher tax interest rate for corporate taxpayers, set by the Tax and Recovery Interest Decree, is invalid. The court found it unfairly singles out companies by imposing a heavier burden than on other taxpayers.
The case centers on the Tax and Recovery Interest Decree, which imposes an 8% interest rate on corporate income tax arrears, significantly higher than the rate applied to other taxpayers. The Dutch Tax Authority charged a corporate taxpayer EUR 90,969 in interest after issuing a provisional corporate income tax assessment for the 2021 financial year.
The taxpayer challenged the rate, arguing it was disproportionate and unjustified compared with the interest charged to individuals and other tax categories.
After a lengthy review process, including submissions from 149 third parties and an opinion from Advocate General RJ Koopman recommending dismissal of the appeal, the Supreme Court sided with the taxpayer.
Court finds rate discriminatory and unjustified
In its ruling, the Supreme Court confirmed that while the provision was carefully prepared and sufficiently motivated, the higher rate could not be justified on legal grounds. The court held that tax debts are not comparable to commercial receivables, and therefore, the higher rate for corporate taxpayers lacked a reasonable basis.
The court further noted that the 8% rate imposed a significant burden on corporations—often double the rate applied to other taxpayers—without serving a clear objective beyond budgetary considerations. The court emphasised that budgetary goals alone do not justify imposing a heavier burden on a specific group of taxpayers.
Interest Rate Reduced to 4%
As a result, the court ruled that the 8% rate is non-binding and must be disregarded. The corporate income tax interest rate should instead be set at 4%, aligning with the general rate applied to other taxes.
