Second citizenship - a reason for a close tax audit in the Netherlands?

Second citizenship - a reason for a close tax audit in the Netherlands?

The Dutch tax authorities periodically revisit past tax reporting periods for additional checks. This time, the tax office checked the declarations of 2012-2015, and special attention was paid to the citizens of the Netherlands with dual citizenship. The IRS confirmed this after an investigation by Trouw and RTL Nieuws.

But we have no cause for concern in you. First, because the second citizenship was not the only one, but in addition to four other criteria that fall under closer scrutiny. According to the tax service itself, this point in the data of taxpayers was the reason for a more thorough revision of the declarations of 11 people.

And secondly, these are the affairs of bygone days, since since 2014 the second citizenship is no longer registered in the database of personal files. As follows from today's official letter from Secretaries of State Hans Vijlbrief and Van Huffelen to the House of Representatives, since 2015 there have been no additional checks on the declarations of people with second citizenship.

Now a different category of taxpayers has come to the attention of the Tax Service: for additional control, the system selected people without Dutch citizenship, but living in the Netherlands and being tax residents of the Netherlands. According to the assurances of the same secretaries of state, this check will be completed on May 15 this year. According to the plans of the tax service, this should be completed earlier, and by the end of 2019, all this data should have been deleted from the systems, but the verification was delayed.

Unfortunately, we have no information on how many people were verified on this basis. It is also not clear which nationals of countries living in the Netherlands have come under similar additional checks in recent years.

Ethics check

While the IRS denies that such additional checks were motivated by nationality, ethnicity, or race, several individuals filed complaints in 2019. These cases are currently under investigation by the Dutch Data Protection Authority.

The second investigation into the state of affairs in the tax authorities is carried out by the State Audit Service. Its purpose is the legality of the rules and selection criteria for additional taxpayer audits.

“We strongly discourage ethnic testing,” Hans Vijlbrief and Van Huffelen reiterate in their letter. They also do not support the very principle of determining taxpayers by citizenship. In their opinion, the tax service must have strong legal grounds in order to have access to information about citizenship.

Child care allowance

Trouw and RTL's reports of abuse in the history of childcare benefits added fuel to the fire. The media claim that most of the families who were mistreated as fraudsters had second citizenship. The IRS denies this fact, arguing that in this particular case, only the parents' Dutch citizenship was checked, as otherwise they may not be eligible for benefits. Whether this is correct should be clear from various studies.

We would like to once again draw your attention to the fact that these checks are not a reason to panic. If you have received a letter from the Tax Service with the results of a re-check of previous years, the first thing we recommend that you do is take a photo or scan of such a letter, send it to us at Nalog.nl at info@nalog.nl - and we will help you understand the situation.