On 25 September, the Supreme Court ruled that the tax authorities should not profit from their own inertia. What was going on? The taxpayer in this case filed an income tax return for the year 2003 on 30 June 2004. The inspector issued a final income tax assessment more than three months later, dated 15 April 2005. In doing so, the inspector charged tax interest for the period from 1 January 2004 to 15 April 2005.
Relying on the legislative history, the taxpayer took the position - that if no (preliminary) assessment has been imposed within three months after filing a tax return, no levy interest may be charged from that moment onwards. In that view, tax interest should only be charged up to and including 30 September 2004. The Supreme Court agreed with the taxpayer; not because of the legislative history, but based on the principle of due diligence. According to the Tax Administration's policy, as reflected in the legislative history, the inspector should have issued a (provisional) assessment within three months of filing the tax return. This applies even if the taxpayer did not expressly request it.
This is different only if and to the extent that the exceeding of the three-month period is not attributable to the tax authorities. If the tax inspector wrongly exceeds the three-month period, the levy interest should be limited under the principle of due care. According to the Supreme Court, the inspector may then not charge more levy interest than if he had imposed a (provisional) assessment in accordance with the tax return at the end of the three-month period. The Supreme Court therefore determined that only levy interest was due for the period from 1 January 2004 to 30 September 2004.
