Repentance (foreign) income and assets / inkeerregeling

As a tax resident of the Netherlands you are taxable for your worlwide earned income as well as all worldwide held assets. Especially expats are not aware of the fact that there is a tax liability for assets held outside the Netherlands. Expats with a pending 30% ruling will benefit from a limited scope for taxation of their passive assets. However without a 30% ruling expats who are tax resident of the Netherlands will have the same tax liability as Dutch nationals. The tax authorities have the possibility to impose an additional tax assessment going back twelve tax years. Also if the tax authorities found out on their own that not all assets and/or income have been subject of Dutch tax before, they may impose a fine. This fine may end up being 300% of the additional tax payable. Also accrued interest will be calculated on the additional tax payable. An additional point of attention in this regard is that all countries within the European Union will automatically share information with each other related to held bank accounts within the European Union. In addition in almost all income tax treaties worldwide an article on exchange of information is taken up.

Even if you mention these assets and/or income yourself still a, although lowered, fine may be imposed. The authorities allow for a repentance possibility through the so called inkeerregeling. If you mention these assets yourself to the tax authorities, and without prior notice thereto of the tax authorities, the maximum fine of 300% calculated over the tax due (1.2% on the value of your equity & progressive rate of 52% on income) will be lowered. However it is important to enter in this procedure without reservations, all equity and/or income has to be mentioned in order for the fine not to be imposed.

Till July 1st 2015 it is possible to enter into this procedure lowering the fine to 30% (this is 10% of the maximum 300% fine) of the missed equity and/or income tax, as of July 1st 2015 this will become 60% (this is 20% of the maximum 300% fine). The two most recent tax years will be in principle free of fines.

We are experienced with handling the full ‘inkeerregeling’ procedure and would be glad to assist you further. Please contact Jan-Hein van Leeuwen for additional information: 06.46605520.