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Tightened rulings increase the workload at tax authorities

16-01-2017 - Bridge Consulting

Tightened rulings increase the workload at tax authorities
By tightening up the rules for issuing tax returns by the countries of the European Union, the Tax and Customs Administration gets a lot of extra work. That is what two tax law professors say in the FD. Because of this extra workload, it is also more difficult for companies to make agreements with the tax authorities

Stricter rules
During the Ecofin in December, European finance ministers agreed to stricter rules for tax returns. This tightening means that Dutch ruling practice has to be changed. That is what Jan van de Streek and Martijn Nouwen say in the FD, both are professor of tax law at the University of Amsterdam and a PhD student at the same university. The new rules require, among other things, that at least two officials decide on a ruling. They must check in advance whether the new agreements are in line with the rulings issued earlier. For the Tax and Customs Administration, the stricter rules mean that they have to formulate a central administration of rulings, the rulings and their implications for other companies must be published more frequently and the tax authorities must regularly check whether companies correctly apply the issued rulings.

Administrative pressure
This extra work will increase the administrative burden on the Tax Authorities and may jeopardize the accessibility of the tax authorities for businesses, according to Van de Streek and Nouwen, who are also part-time connected to the Technical Engineering Office of Loyens & Loeff and EY respectively. . And the willingness of the tax authorities to provide certainty in advance to businesses about taxes to be levied is regarded as a crown jewel of the Dutch business climate, according to the professors.

Streamline the approval process
Other tax experts, such as tax advisor Arjo van Eijsden, do not agree with this in the same article. Van Eijsden believes that the tightened regulations will have little effect on Dutch practice. He does, however, endorse that the service gets more work through the exchange of rulings, but for the new rulings the work pressure can be accommodated by streamlining the approval process.