Higher tax interest rates from 2024

Christiaan Cornet

Tax director

9 feb. `24

From January 1, 2024, a new system is in place to determine the amount of tax interest. The Tax Authorities can charge interest in many cases, but they rarely have to pay interest. This new system ensures that the tax interest rate is increased in all cases from January 1, 2024. Due to this increase, timely application for a correct provisional assessment becomes even more important. In this article, we will guide you through the new system and how to ensure that no tax interest is due.

Tax Interest

Interest on taxes is the interest charged by the Tax Authorities when the assessment is not made in a timely manner. This may be due to a late submission of (preliminary) tax returns or because the amount owed on an assessment is higher than the declared amount in the submitted returns. The date from which interest on taxes is charged depends on the type of tax. In some cases, the Tax Authority also reimburses interest on taxes. However, this only occurs when the Tax Authority delays issuing an assessment without reason.

Amount of tax interest

The amount of tax interest was linked to the statutory interest rate until December 31, 2023. Whenever there was a change in statutory interest rate, the tax interest had to be adjusted accordingly. This often resulted in multiple rate adjustments per year.

From January 1, 2024, the system is based on the following principles:

The level of tax interest is linked to the percentage of the refinancing rate of the European Central Bank.
The percentage is determined once a year.

Corporate tax

The interest rate of corporate tax in 2024 is 10%*, ECB refinancing interest 4,5% + 5,5%. The rate can never be lower than 5,5%.

Income tax

The interest rate of income tax for 2024 is set at 7,5%**, ECB refinancing rate 4,5% + 3%. The interest rate can never be lower than 4,5%.

Allowance

For allowances, the above-mentioned system does not apply, and a fixed rate of 4% has been established.

Preventing or limiting tax interest

Tax interest will not be charged if the tax return is filed on time and the assessment is issued in accordance with the filed return. A corporate tax return is considered filed on time if it is received by the Tax Authorities before June 1 following the year for which the return is filed. An income tax return is considered filed on time if it is submitted before May 1 following the year for which the return is filed.