New assessment, investigation, retention and objection periods as of assessment period 2023

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At the end of 2022, the law on various tax and financial provisions was introduced. The most important change in this was the extension of the investigation, assessment, retention and objection period. According to the fiscal administration, an extension of the periods was necessary in order to be able to fulfil the increasingly complex tasks.

Investigation and assessment periods

For the investigation and assessment periods, there are four important periods as of the assessment year 2023:

  1. A declaration submitted in due time: a period of three years is retained
  2. Failing to submit a declaration in due time or at all: the period is extended to four years
  3. Semi-complex declaration: a new period of six years
    1. Declarations by companies required to complete Form 275F for payments to tax havens
    1. Declarations requesting a set-off of the flat-rate part of foreign tax for withholding tax
    1. Declarations that claim an exemption, waiver or reduction of the withholding tax, on the basis of a double taxation treaty, the Interest and Royalties Directive or the Parent-Subsidiary Directive for a resident of another EU Member State
    1. Declarations by companies which have to submit a local file and/or country report in connection with transfer pricing
    1. Declarations for which information relating to DAC 6 or DAC 7 has been received
  4. Complex declarations or fraud: new period of ten years
    1. In the case of hybrid mismatch (Art. 2(1)(16°) WIB 92)
    1. In the case of non-distributed profit resulting from an artificial construction (Art. 185(2) WIB 92)
    1. In the case of a declaration with notification of an offshore legal construction (Art. 307(1)(1) WIB 92)

Retention period

Given the extensions discussed prior to this, the retention period of the books and records has also been extended. This period is now by default the tenth year following the taxable period. There is no difference between the physical books and records and the books and records kept electronically or digitally.

Objection period

The extension of the objection period is to the taxpayer’s advantage. The period is now twelve months, starting from the third working day following the date on which the assessment notice was sent.

This extension of the objection period also applies to the objection periods which had not yet expired on 1 January 2023. Specifically, this means that the objection period will be extended by six months for assessments relating to personal income and corporation tax from the second half of 2022.

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