InsightsFebruary 7, 2019
Tip: How to avoid paying interest on tax as an entrepreneur
The Dutch Tax and Customs Administration charges interest on the VPB (corporate income tax assessment). This interest is currently 8%! The interest is charged on the amount of VPB payable if the assessment is imposed after 1 July.
In case of a 150K profit, the VPB payable is 30K. If you receive the assessment on 1 December, the tax interest will be almost €1300.
How can you prevent this?
You can prevent this by requesting a provisional assessment. You can request one during the year or at the end of the year.
- If you request a provisional assessment during the year, you pay the expected VPB in instalments over the remaining months of that year.
- If you request a provisional assessment after the calendar year has ended but before May 1st, you will have to pay the amount in one go but no interest on tax will be charged.
- Submit your VPB return before 1 April. If you do so, the Dutch Tax and Customs Authorities will not charge interest on tax.
Of course, it’s important to look closely at your cash flow to see if this is attainable, but otherwise it’s a quick way to save money.