Changes to the tax privilege as of January 1

The Supreme Court's guiding case law on the right to refuse to disclose information is being codified. It is also clarified when a taxpayer cannot invoke their right to refuse to provide certain information to the Tax Administration. These are the two main points of the amendment to the tax privilege, which will take effect on January 1st.

The amendment is part of the Fiscal Omnibus Act 2024 bill . The Senate approved this bill on Tuesday, which was passed by the House of Representatives at the end of October. This legislation amends Articles 51 and 53a of the General Tax Act (AWR) and Articles 61 and 63 of the Collection Act 1990 (Iw).

Right of refusal
The amendment to Article 51 of the General Tax Act (AWR) and Article 61 of the Income Tax Act (Iw) clarifies the scope of a taxpayer's right of refusal. This aligns with, among others, the Tradman v. State judgment. The goal is to clarify that the confidentiality of a taxpayer's contacts with a person entitled to confidentiality is not grounds for refusing to provide the Tax and Customs Administration with information that exists independently of those confidential contacts.

Capacity
The other clarification concerns the relationship between a taxpayer and a person entitled to confidentiality listed in Articles 53a of the General Tax Act (AWR) and 63 of the Income Tax Act (Iw), such as a lawyer or civil-law notary. Without the right to confidentiality referred to in these articles, a taxpayer has no right of refusal under the proposed clarification. These articles also codify leading case law from the Supreme Court. Information covered by the right to confidentiality must be information exchanged with the person entitled to confidentiality in their role as the person entitled to confidentiality.

Earlier proposal
In 2020, an earlier proposal was submitted for consultation. That proposal generated several critical responses, including from the Royal Dutch Association of Tax Advisers (KNB) . The government has taken this criticism to heart and has introduced an amended regulation. According to the government, this will leave the right to refuse to testify in the tax domain substantively unchanged. The new regulation addresses the objections raised by the KNB.