vrijdag 23 december 2011

The unstoppable tax collector - mail returns undelivered

Once again I experienced today what happens if something goes wrong, nobody does anything and the computersystem at the tax authorities continues spitting out tax claims and warnings.

In this case our client temporary left the Netherlands to work in another country. A country which unfortunately doesn't have a well organized post system like we have in the Netherlands. After his departure we filed the proper tax return. The tax authorities automatically processed the tax return and issued a tax assessment, unfortunately forgetting the requested exemption for income earned abroad. The applicable tax treaty, based on the standard OECD tax treaty, states that income from employment is taxed in the country in which the work is done. The work is done in the other country giving this country the right to tax the related income and therefore the Netherlands should exempt this income (which the tax authorities also confirmed today when we called them and confronted them with the filed tax return). But as said, this exemption was overseen by them at the time, which unfortunately often happens during the digital process, and so a tax assessment was issued claiming an additional amount from our client with regards to the foreign income.

It took this tax assessment weeks to arrive at the place of destiny, but unfortunately it was not delivered to our client but instead returned to the tax authorities with the comment that it could not be delivered. So anybody could see that our client did not receive the envelope and therefore did not read the contents. Unfortunately that is not what the tax authorities thought. Or they may have thought that but didn't take the right measures. Because in the mean time the computer system continued to spit out reminders, warnings and eventually the famous last notice on behalf of the Dutch queen. They all remained unpaid so the tax authorities started withholding money from other sources.

That was the moment our client found out and we heard about it for the first time. Just wish we would have received the requested digital copy of the tax assessment at the beginning, which didn't happen either. Now we have to send several requests to the tax authorities to adjust the tax assessment, stop the withholding of money and to pay back whatever has been withheld already.

The tax return contained the unique ID every registered tax advisor has. This way the tax authorities can see which advisor has filed the tax return. This means that the tax authorities could have picked up the phone when they got the tax assessment back undelivered to ask us if we knew how to reach our client. This way the unnecessary reminders, which nobody would see anyway, could have been prevented. One phone call could have saved a lot of work. But that didn't happen. My advise to the tax authorities: if you notice something strange just call.

Also: if you (being the tax authorities) receive a tax assessment back stating that it was not delivered you know that it won't be paid and that the tax payer will not be able to object against it within the time limit of 6 weeks. Stop the collection procedure at that moment till you have the proper address details. It would have been very unpleasant for our client to come home again from a year of hard work outside the Netherlands to find his house without television and furniture because the tax authorities sold it due to unpaid tax claims which never reached him (and were wrong too!).

The Court of Justice already decided several times that the tax authorities must prove, in case of a dispute, that the tax assessment actually reached the tax payer (timely). In this case it is clear that the tax assessment never reached the tax payer. Doing nothing is then the wrong option, only leading to much more work.

Well, the letters of objection and requests have been filed today. Let's see how long it will take the tax authorities to change it back to how it should have been done from the beginning.

Once the online portal for tax payers will be available "everybody" should be able to check the status of his/her own tax return online. If this includes confirmations of updates by email the above problem should not occur again. Why "everybody"? Because I expect that the portal will only be available to people with a DigiD and non-residents do not have a DigiD (unless they got one earlier during a resident period which is still valid).

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