Income tax and corporation tax fraud

Most people and companies pay their taxes, such as income tax and corporation tax. But those with less noble intentions search for loopholes in the system. Some do so only once if an opportunity arises, but others do so systematically and on an organised basis, for example by not declaring their income or savings to the Tax and Customs Administration. It is important to keep one step ahead of them. Tax fraud costs the Dutch state many billions of euros every year.

Forms of income tax and corporation tax fraud

There are several forms of income tax and corporation tax fraud. They include:

  • not declaring income or savings;
  • unlawfully claiming or over-claiming tax credits and deductions; 
  • unlawfully claiming certain forms of tax relief, such as the investment tax credit; 
  • providing false information on a company's place of establishment.

The FIOD is investigating the foreign bank accounts of Dutch residents more often in order to detect undeclared savings. People have undeclared savings if they do not declare all their savings in their annual tax returns.

Tax amnesty: a measure against undeclared savings

The fines imposed on people with undeclared savings have been increased in recent years. More people are therefore making use of a tax amnesty under which they can declare their foreign assets in full. If they do so voluntarily they will not be fined in respect of the most recent years and receive a lower fine in respect of other years.

The Dutch government is also working more often with national and international authorities. The Dutch and American tax authorities, for example, will automatically exchange information in order to combat tax evasion and undeclared savings. Companies are also being examined for evidence of tax evasion.

Fines for individuals with undeclared savings

As of 1 July 2016 people who admit to having undeclared assets abroad face a fine of 120% of the tax they owe. 

If the Tax and Customs Administration uncovers such assets themselves, the fine can increase to 300% of the tax owed.

In the years ahead, the tax authorities of 100 countries will be exchanging banking information in an effort to detect tax fraud more quickly.

Reporting tax fraud

Entrepreneurs can use the TaxLine to report suspected fraud.