Focus on corona tax debts
During the corona pandemic, businesses and the self-employed were granted tax deferrals totalling €40 billion that helped many of them to survive. Around €26 billion of these extensions have now been settled, but some €5.7 billion of the remaining €14 billion is proving problematic and may not be received in full or may largely prove impossible to collect. And the Tax and Customs Administration currently has too little capacity to pursue these cases.
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| Of the €40 billion of tax deferrals granted to businesses, more than half – over €26 billion – has since been settled under payment arrangements | The Tax Administration has too little capacity to enforce recovery and appoint bailiffs if businesses fail to pay their tax debts or payment arrangements are discontinued. Similarly, there is too little capacity to offer customised arrangements to SMEs and the self-employed. |
As at 1 January 2024, some 210,000 businesses still had outstanding tax debts of €14 billion. Of these debts, €8.3 billion can realistically be expected to be received. Meanwhile €2.8 billion due is unlikely to be received in full, partly depending on the approach adopted by the Tax Administration. Most of these amounts relate to businesses with instalment arrears. Enforced recovery is likely to be required if the Tax Administration is to recover any of the remaining €2.9 billion. These amounts are due by businesses that have not yet made any payments or whose payment arrangements have been discontinued. The Minister of Finance reported last year that a total of €2.5 billion was regarded as irrecoverable. This estimate was updated in the Spring Memorandum.
Why did we audit?
Corona tax debts still outstanding on 14 August 2023 totalled €14.8 billion. Large numbers of businesses with payment arrangements were behind on their monthly instalments or had not yet paid off any amounts. With the Tax Administration now starting to demand repayment, some of these businesses may yet have to apply for insolvency. There were also signs that the Tax Administration has insufficient capacity to perform this operation effectively.
What did we audit?
We audited the problems faced both by businesses and the Tax Administration regarding corona tax debts. This involved establishing the types of businesses affected and why they had not paid their tax debts, what problems they were facing and whether they were able to pay these debts, as well as investigating the implementation problems faced by the Tax Administration.
Focus investigation
This focus investigation differs from an audit in that it is carried out in a considerably shorter period of time, looks at current events and answers specific, well-defined questions. A focus investigation culminates in a clear, concise report without opinions or recommendations.
Do you have any feedback on this investigation?
We welcome all feedback on our audits and investigations. What do you think about our report? If you have any questions or need further information, mail us at feedback@rekenkamer.nl. We read all emails carefully and treat them in confidence.