Death tax interest will be reactivated on January 1, 2021

The Dutch Tax and Customs Administration will again charge tax interest on deaths from January 1, 2021, if inheritance tax returns are filed late. Due to automation issues at the Dutch Tax and Customs Administration, no tax interest was charged on inheritance tax assessments for deaths from January 1, 2017 onward.

Inheritance tax returns for deaths during the period when the tax interest was deferred will not be subject to tax interest. For deaths between January 1, 2017 , and December 31, 2020, a deferred effect applies. This means that the tax interest remains deferred. The tax interest is only activated for deaths from January 1, 2021 onwards . Tax interest is only charged if the inheritance tax return is filed too late or if the final assessment regulations deviate from the tax return. The filing deadline for the inheritance tax return is eight months after the death. Only after that date will tax interest be charged. Therefore, the Tax Authorities cannot charge this again until September 1, 2021.

Backlogs
The exemption from tax interest was a result of the delayed delivery of the Tax and Customs Administration's new system for gift and inheritance tax processes. This caused significant backlogs in the processing of inheritance tax returns. The department has now returned to its normal processing rhythm. This means that on average, 70 percent of returns are processed within three months of receipt by the Tax and Customs Administration, and 90 percent within six months of receipt.