New regulation VAT supplements applicable as of January 1, 2025
From January 1, 2025, a new obligation will apply with regard to VAT supplementations: if it is found that too little VAT has been declared and paid, this must be corrected within eight weeks by submitting a VAT supplementation to the Tax Authorities. This significantly tightens the replenishment deadline, or at least there is less room for ambiguity. Failure to comply with the replenishment obligation may result in the imposition of fines. In the case of intent or gross negligence, there may even be a fine of up to 100%.
How was replenishment regulated through 2024?
Since January 1, 2012, Article 10a of the Algemene wet inzake rijksbelastingen (hereinafter: AWR) stipulates that taxpayers are required to ‘spontaneously’ notify the inspector of inaccuracies or incompleteness in data and information relevant to the taxation, which are or have become known to them.
Article 15 of the Turnover Tax Implementing Decree 1968 (hereinafter: the Implementing Decree) stipulates that as soon as a taxpayer learns that a turnover tax return has been filed incorrectly or incompletely in the past five calendar years, resulting in an overpayment or underpayment of tax, he must still provide the correct and complete information, data or instructions. The appropriate way to do this is to file a supplement. This supplement must be filed before the taxpayer “knows or should reasonably suspect” that the inspector is or will become aware of the inaccuracy or incompleteness in question.
How is it regulated now?
The aforementioned provisions continue to apply in full. As of January 1, 2025, it has been added that the supplement must be filed no later than eight weeks after the taxpayer discovers the inaccuracy or incompleteness. In other words, if a businessman finds that too little VAT has been declared and remitted, he is obliged to correct this via a VAT supplement within eight weeks. Failure to do so could result in a fine. Up to and including 2024, the rule was that filing a supplement had to be done as soon as possible. As of 2025, this observation deadline is clearly defined: within eight weeks of the observation, the VAT supplement must be submitted.
How will the replenishment work in practice from 2025?
The cabinet decided to set the deadline for filing a suppletion at eight weeks from the moment it is established that a situation exists that leads to a suppletion. According to the Cabinet, this adjustment prevents entrepreneurs from sitting idle after preparing their balance sheet while knowing that they need to file a supplement. The new deadline of eight weeks is in line with the deadline for filing a correction notice for payroll taxes. Both regulations use the same deadline starting in 2025.
The eight-week period will apply as of Jan. 1, 2025. For entrepreneurs who have already found before this date that a VAT supplement is necessary, the period starts to run on January 1, 2025. This means that the VAT supplement must be submitted by February 26, 2025. If a VAT supplement leads to a VAT amount to be paid, tax interest will be charged.
For replenishments for tax year 2024, tax interest can be avoided by filing the replenishment before April 1, 2025. If it has previously been determined that a replenishment is necessary, it must be filed within eight weeks to avoid an overpayment penalty. The new rules for VAT replenishments from 2025 bring more clarity and uniformity, but also set stricter requirements for timely corrections.
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