Corporate income tax
Because corporate income tax interest is linked to the interest for statutory trade relationships, this tax interest is the highest. You pay 10% tax interest on the profit from your BV in 2024. You don’t pay tax interest if you file before June 1, 2025, and the Tax Authorities accept your assessment without changes. From July 1, tax interest is calculated until 6 weeks after the issued assessment.
VAT and payroll tax
For VAT and payroll tax, you only pay interest on supplementary assessments. You generally remit VAT and payroll tax within the month following the period. You automatically receive a fine if you fail to file on time. So, tax interest is only applicable when a supplementary declaration is submitted for a closed fiscal year. You pay tax interest on a supplementary declaration for 2024 if it’s submitted after April 1, 2025. The tax interest is calculated retroactively from January 1, 2025, and lasts until 14 days after the supplementary assessment.
How to avoid tax interest?
As mentioned, you don’t pay tax interest if you file before a certain date. However, this is not always possible. You can avoid tax interest for income tax and corporate income tax by filing a provisional assessment. By estimating your profit, you pay taxes throughout the year. You can choose to pay this at the beginning of the year or in monthly installments. The amount paid with your provisional assessment will ultimately be reconciled with the amount you actually owe in income tax. So, you only pay tax interest on the difference between the provisional and final assessments.
Keep in mind that if you request a provisional assessment for the current year, you will also receive one the following years. Usually, as a business owner, you automatically receive a provisional assessment from the Tax Authorities within 1 year. Your profit is estimated based on a previous declaration. It’s always possible to adjust a provisional assessment if it is too high or too low, so inform your bookkeeper if you estimate your profit differently than the Tax Authorities have.
If you request a provisional assessment after the end of the year, you must pay this assessment in one installment and do not have the option to pay in installments.
Is tax interest tax-deductible?
Tax interest is tax-deductible for business tax forms, namely VAT, payroll tax, and corporate income tax. The tax interest on your income tax and ZVW contribution is not deductible because these two tax forms are private.
Can you receive tax interest?
For an income tax return, the Tax Authorities have 13 weeks to issue an assessment. If they take longer without making any adjustments and you receive a tax refund, they will pay tax interest on this amount. For VAT and payroll tax, the Tax Authorities have 8 weeks to arrange the refund. If they take longer, they will also pay tax interest.
Do you have questions about the tax interest? Feel free to contact your bookkeeper.
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