No Penalty for VAT Entrepreneur in Financial Distress

• The Court of Appeal in ‘s-Hertogenbosch ruled that article 69a of the General Tax Act is not intended for (well-meaning) entrepreneurs who are in financial difficulties, as seems to be the case in this situation.
• X, who operates a sole proprietorship accounting firm, did not pay VAT for years because he prioritized his child support obligations. He also did not pay the subsequent tax assessments with penalties.
• The Court found X guilty of not requesting a concrete and specified payment extension at the right times, but did not impose a penalty or measure.
• The purpose of article 69a of the General Tax Act is to exclude liability for actions of a taxpayer without clear evidence of malicious intent.
• The tax legislation provides sufficient other adequate instruments, and the Tax Authorities are expected to act promptly and effectively.
• Despite X’s intentional failure to pay VAT, no penalty or measure was imposed on him.

Source: taxlive.nl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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