This week, more than 2 million Dutch people will receive their provisional income tax assessments for 2024 in the post. These are the assessments on which tax is due. The provisional refunds were already sent out at the end of 2023.
No payment discount
What many people notice is that the tax assessment does not mention the payment discount. This is correct, as this scheme has been abolished for income tax with effect from 2024 (for corporation tax, the payment discount was abolished a few years ago).
If, up to and including 2023, you paid the tax assessment in full by the last day of February at the latest, you were entitled to deduct the payment discount from the amount due on the assessment. The payment discount was calculated as half of the interest benefit (at the rate of collection interest) enjoyed by the tax authorities because the tax was received in a single instalment rather than spread over 11 months.
Now that the payment discount has been abolished and you’re once again earning (a little) interest on your savings account, it’s generally more cost-effective to pay in instalments (although the amounts involved are usually not very large). With a direct debit authorisation, you don’t have to worry about it much, other than ensuring there are sufficient funds in your bank account by the end of each month.
Applications for a reduction
You cannot lodge an objection against a provisional assessment. However, it is possible to ask the Tax and Customs Administration to reduce (or increase) the amount of the provisional assessment. The Tax and Customs Administration almost always grants such a request. You must submit a request for a reduction in a provisional assessment via MyTax Office or via your tax adviser’s tax return software.
Please be aware that, with effect from 2024, a number of tax rules have changed, which means that your provisional tax assessment may show a higher amount payable than in previous years. These changes have been partly incorporated into your provisional tax assessment, but as this assessment is based on the information from your 2022 tax return (or perhaps an even earlier year), they may not have been fully taken into account. It is certainly worth taking a close look at your 2024 provisional tax assessment (or having someone else do so).