{"id":1627,"date":"2025-07-28T06:00:00","date_gmt":"2025-07-28T04:00:00","guid":{"rendered":"https:\/\/vwg.nl\/uncategorized\/zakelijkheid-van-uitgaven-onvoldoende-onderbouwd\/"},"modified":"2026-03-03T10:34:58","modified_gmt":"2026-03-03T09:34:58","slug":"the-business-necessity-of-the-expenditure-has-not-been-sufficiently-substantiated","status":"publish","type":"post","link":"https:\/\/vwg.nl\/en\/zakelijkheid-van-uitgaven-onvoldoende-onderbouwd\/","title":{"rendered":"Objectivity of expenditure insufficiently substantiated"},"content":{"rendered":"

An entrepreneur who runs an accountancy and tax consultancy firm has failed to provide sufficient evidence to substantiate the business-related nature of the expenses charged to his profits, according to Zeeland-West Brabant District Court<\/a>.<\/p>\n\n\n\n

The Tax and Customs Administration has announced that it will be paying particular attention to the evidence supporting expenses charged to profit. See also our article Extra vigilance on arm's length spending<\/a>.<\/p>\n\n\n\n

Three aspects<\/h2>\n\n\n\n

Two aspects are at issue in this case. On the one hand, the question is whether the expenditure can be deducted from profits as business expenses. On the other hand, the business owner argues that the Tax and Customs Administration does not have the new evidence required to impose additional tax assessments. Finally, the case discusses whether an administrative fine was rightly imposed.<\/p>\n\n\n\n

New fact<\/h2>\n\n\n\n

The Tax and Customs Administration had carried out an audit of the entrepreneur\u2019s accounts for the years 2013 to 2017 inclusive. During the appeal proceedings following this audit, the Tax and Customs Administration began to suspect that expenses had also been wrongly charged to profit in 2019 and 2020. Consequently, an investigation into these years will be carried out in 2022.<\/p>\n\n\n\n

The final tax assessments will already have been issued by that point, meaning that the Tax and Customs Administration can only correct those years by means of additional assessments. The business owner argues that the Tax and Customs Administration could already have been aware of the circumstances giving rise to the additional assessment when it issued the original assessments.<\/p>\n\n\n\n

The Court considers that the general rule is that, when determining the tax assessment, the Tax and Customs Administration may assume that the information provided by the taxpayer is correct. The Tax Authorities are only required to investigate a tax return further if they have reasonable grounds to doubt its accuracy. The audit of the tax returns for 2013 to 2017 does not automatically mean that there is no new fact.<\/p>\n\n\n\n

Business?<\/h2>\n\n\n\n

The Court holds, in accordance with established case law, that the business owner must prove that the expenditure was incurred in the interests of the business. The business owner has failed to do so. The Court states: \u201cWith regard to virtually all the expenses included in the tax return, it is not possible to verify whether they are business expenses, as there are no records to support them. Consequently, it is not possible to verify for which client and for what purpose these expenses were incurred.\u201d<\/em>. And then: \u201cFurthermore, a significant proportion of these costs do not, at the very least, appear to be business expenses for an accountancy and tax consultancy firm, such as purchases from toy shops, beauty treatments and boot camps.\u201d<\/em>.<\/p>\n\n\n\n

Fine<\/h2>\n\n\n\n

With regard to the penalty for an offence (25% of the additional tax claimed), the Tax and Customs Administration has, since 2022, borne the heightened burden of proof to demonstrate convincingly that gross negligence is present. Gross negligence is a degree of culpability bordering on intent in terms of reprehensibility, and gross negligence.<\/p>\n\n\n\n

The Court finds that the Tax Authorities have met this burden of proof, as the business owner:<\/p>\n\n\n\n

    \n
  • it was pointed out during the audit that the accounts were not in order;<\/li>\n\n\n\n
  • runs an accountancy and tax consultancy firm himself;<\/li>\n\n\n\n
  • has not kept the administrative records relating to the expenditure and yet, when submitting the tax returns, chooses to treat the expenditure as business expenses;<\/li>\n\n\n\n
  • cannot provide any evidence whatsoever that a significant proportion of its expenditure is relevant to its business.<\/li>\n<\/ul>\n\n\n\n

    The Court considers: \u201cDepending on how it is received in court, the party concerned records amounts for which she still has proof of payment \u2018on file\u2019, then waits to see whether the inspector notices this and, if so, first examines which costs were genuinely business-related.\u201d<\/em>.<\/p>\n\n\n\n

    Nevertheless, the Court is reducing the fine imposed by 15% because the reasonable time limit for hearing the case has been exceeded.<\/p>","protected":false},"excerpt":{"rendered":"

    Een ondernemer, die een administratie- en belastingadvieskantoor exploiteert, heeft de zakelijkheid van ten laste van zijn winst gebrachte uitgaven onvoldoende onderbouwd, aldus Rechtbank Zeeland-West-Brabant. De Belastingdienst heeft aangekondigd speciale aandacht te gaan schenken aan de onderbouwing van ten laste van de winst gebrachte uitgaven. Zie ook ons artikel Extra alertheid op zakelijkheid van uitgaven. Drie […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1627","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts\/1627","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/comments?post=1627"}],"version-history":[{"count":0,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts\/1627\/revisions"}],"wp:attachment":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/media?parent=1627"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/categories?post=1627"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/tags?post=1627"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}