When asked how long you must keep administrative records, the usual answer is: 7 years. That is the tax retention period, which applies to business records. The tax specialist then adds that information relating to VAT and property must be kept for at least 10 years. This is the period during which the reassessment scheme may apply.
Private individuals
The tax retention period does not formally apply to private individuals. However, they would be well advised to keep the supporting documentation for the items in their income tax return for as long as the Tax and Customs Administration can make a back-dated tax assessment. This can be done within the five years following the calendar year to which the tax relates. The oldest year for which additional tax may be claimed in 2019 is therefore 2014. This five-year retention period can also be found on the Tax and Customs Administration’s website.
The deadline for additional assessment is extended by the period for which the tax authorities have granted you a deferral for submitting your tax return. Upon request, the tax authorities will usually, as a standard procedure, extend the submission deadline from 1 May to 1 September. Those four months’ extension are then added to the period for additional assessment. If your tax return is covered by a tax adviser’s extension scheme, a 12-month extension will be granted.
Justification for the deduction of (mortgage) interest
Recently, the Supreme Court However, it has been confirmed that the documents supporting the deduction of (mortgage) interest on your own home must be kept for much, much longer. This is because the Tax and Customs Administration may ask you each year to provide evidence for that deduction. Among other things, this requires details that you collect when purchasing or building (or subsequently renovating) your home. In most cases, the deduction for (mortgage) interest applies for 30 years. Even in year 30, the tax authorities may still require you to substantiate the deduction, using details from year 1 where necessary.
The Supreme Court confirms that there is nothing to suggest that the Tax and Customs Administration is required to request supporting documentation for the deduction of (mortgage) interest within the period for issuing additional assessments, which applies to the first tax return in which the deduction was included. Nor does the fact that the Tax and Customs Administration has previously accepted tax returns in which the deduction was included mean that it is not permitted to request the supporting documentation (again).