If you discover that you have paid too much or too little VAT for past tax return periods, you must submit an amended return. We have previously written an article on this subject.
Supplementary tax return
You are required by law to do this of your own accord, within a reasonable period of time after you have discovered that the tax return(s) submitted are incorrect. From 2018 onwards, the supplementary return must be submitted digitally. This can be done using a software package, or by completing a form in your personal account on the Tax and Customs Administration’s website. You will then log in using the same details as those you use to submit your periodic VAT returns.
No penalty
The Court of Appeal, ‘s-HertogenboschThe Court has recently ruled that no penalty may be imposed for failing to submit, or submitting late, a supplementary VAT return. In this case, the Court considers it to have been proven beyond reasonable doubt that the defendant was guilty of deliberately failing to comply with the obligation to submit a supplementary return. However, it ruled that this obligation is contrary to the prohibition on self-incrimination (also referred to as the nemo-tenetur principle).
The case concerns a “classic” situation. A haulage company is experiencing serious financial difficulties. Against this backdrop, a decision is taken to submit VAT returns showing amounts that are far too low. The reduced VAT payable provides some breathing space for the company’s cash flow. The under-declared VAT returns are submitted over an extended period. And, naturally, the omissions are not rectified by means of supplementary returns.
It is expected that the Public Prosecution Service will lodge an appeal in cassation against this ruling. We will therefore have to wait and see whether the Supreme Court also takes the view that no penalties may be imposed for failure to comply with the obligation to submit supplementary information.
Should I carry on taking supplements after all?
The decision of the Court of ‘s-Hertogenbosch does not, of course, affect the obligation to submit annual, quarterly or monthly VAT returns on time and for the correct amounts. Businesses that fail to meet this obligation may be penalised. This usually takes the form of an administrative fine, but in the event of more serious breaches, such a business may, of course, face criminal prosecution.
An omission in a periodic tax return cannot be rectified by submitting a supplementary return. However, a business owner who corrects errors on their own initiative is usually eligible for a reduction in the penalty.
To clarify: the defendant in the case decided by the Court of Appeal in Den Bosch was sentenced by the Court to a six-month suspended prison sentence (with a probation period of two years) and to 240 days’ community service. This sentence was imposed for the deliberate submission of incorrect VAT returns.