For many years, a director and major shareholder (DGA) has derived his income solely from his own home, but has consistently drawn money from his company. The Zeeland-West-Brabant District Court considers that the director and major shareholder has permanently withdrawn these funds from the company. The funds withdrawn are taxed as a benefit in Box 2, and a penalty for an offence of 50% is imposed.
Current account debt
The current account debt rose from €1,011,027 to €1,677,984 between 1 January 2011 and 1 January 2017. The current account is not based on any written agreement. No security has been provided, nor have any arrangements been made regarding repayment. During these years, the director and major shareholder had no income from employment or property other than that from his own home. The amounts withdrawn from the current account were used to cover living expenses and to settle tax liabilities.
Standard discount
The court considers it plausible that the director and major shareholder will not repay the funds withdrawn to the company. After all, everything has been spent on living expenses and settling tax debts. The court is of the opinion that this constitutes a withdrawal, as the funds have permanently left the company. Given the circumstances, the court also considers it plausible that the company and the director and major shareholder were aware, or ought to have been aware, that the sums would not be repaid. The withdrawals are taxed as a regular benefit in box 2.
Fine
Between 2011 and 2016 inclusive, the director and major shareholder (DGA) failed to submit his income tax returns, or failed to do so on time. The DGA had taken the view that he had no income and was therefore not required to submit a tax return. Initially, the tax inspector had imposed an administrative fine of 50%. However, this fine was reduced ex officio (to 10%) because the proceedings had taken too long.