No decision is also a decision? What to do if the Inspector fails to make a decision

In tax law, conflicts usually arise with the tax authorities when they make a decision or issue a decision. This could include an excessive assessment, or the refusal of a deduction in the return. A somewhat less frequently highlighted problem is the absence of a decision by the tax authorities, which leaves taxpayers in uncertainty or does not receive a refund.

What can you do when the Inspector doesn't make a decision? Quite a bit! We'll explain it for you.

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The closed system of remedies - not everything can be objected to

To start with the theory: in tax law, you can only object (file a legal remedy) against the Inspector's decision where it is expressly provided. So not all decisions can be appealed. This is called the “closed system” of remedies. In tax law, it is therefore very important to check which decisions are “subject to objection” by law.

With that in mind, it is not surprising that it is difficult to enforce a decision by the tax authorities. After all, no decision is not an “objectable” decision. Because the legislator also saw this, it has created the possibility to force the tax authorities to reach a ruling. More specifically, there are two options:

1. Claiming a penalty payment from the tax authorities.
2. Appeal against the absence of a decision.

I will explain these options with their pros and cons.

Claiming a penalty payment for failure to make a decision

‍The scheme in general

‍If an inspector, such as that of a municipality or the tax authorities, does not decide on an application in time, he is obliged to penalty payment payable to the interested party (if the interested party claims it). This applies to any day that the decision is not reached after the final decision period, up to a maximum of 42 days. An interested party must first send a notice of default if the inspector exceeds the legal time limit for a decision. After receiving this notice of default, the inspector still has 14 days to make a decision. If no decision has been made after this period, the period in which the penalty payment is due begins. The penalty payment is calculated as follows:

• €23 per day for the first 14 days,
• €35 per day for the next 14 days and
• €45 per day for the last period.

The maximum penalty payment (2024) is €1,442.

‍The scope of the penalty payment scheme

‍In two judgments, the Supreme Court further defined the scope of the penalty payment scheme for tax law. In principle, the penalty payment regulations only cover “orders upon request”. However, there are also decisions that the Inspector must take “ex officio” (i.e. “on his own”). However, the Supreme Court has also declared the penalty payment scheme applicable to requests for an ex officio reduction and adjustment of the income tax assessment as a result of a reduced WOZ value. The right request at the right time!The importance of taking correct steps within the penalty payment scheme is evident from a judgment where the interested party ultimately did not receive a penalty payment because the procedure was not followed correctly. There are four crucial steps here:

1. Initial Request: The interested party submits a request to receive a decision.
2. Expiry of the decision period: The period within which the governing body must decide expires without a decision.
3. Notice of default: After the expiry of this period, the interested party officially declares the governing body in default.
4. Start of the penalty payment: If no decision has been made two weeks after the notice of default, the penalty period begins.
   

In a specific case, a taxpayer has combined steps 1 and 3 by sending a notice of default immediately after the expiry of a legal period. However, the Supreme Court stated that a reasonable decision period must have elapsed after the initial request before a notice of default is legally valid. This means that the decision period of two weeks after the initial request must have expired, regardless of the original eight weeks that the inspector had before the decision.

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Special situations

There are situations where an inspector does not have to pay a penalty payment, such as when the interested party has waited too long to send a notice of default, the application is manifestly inadmissible or unfounded, or the interested party has no interest in his application. Even if an interested party takes legal action, the obligation to pay a penalty payment remains independent of the court's ruling. If an application is filed by several persons, the penalty payment is divided equally among them. All of this highlights inspectors' obligations and stakeholders' rights in the event of delays in decision-making processes.

Filing an appeal for failure to make a decision

Article 6:12 of the General Administrative Law Act (Awb) plays a crucial role in the procedure for filing an appeal against the inspector's failure to make timely decisions.

Because it would be unreasonable to bind an interested party to a tight period of time if the inspector himself is negligent, filing an appeal against a late decision is in principle not limited to a period of time. However, it must be prevented from being appealed unreasonably late by an interested party, which may lead to a declaration of inadmissibility.

The basic procedure requires that the interested party first informs the inspector in writing of his negligence by means of a notice of default, after which two weeks must elapse before an appeal can be lodged. This step is crucial because it marks the formal start of 'the waiting period'. An exception to this rule applies if the interested party cannot reasonably be expected to send the notice of default.

Furthermore, article 6:12 Awb indicates the steps that must be followed when filing an appeal, namely:

1. The inspector exceeds the statutory period without making a decision.
2. The interested party sends a notice of default to the inspector.
3. Two weeks after the notice of default, without a decision being made, it is possible to file an appeal.
   

These regulations also clarify when a decision has been issued by operation of law and has not been announced in time. It is important that no objection can be raised against not taking a decision or not publishing a decision by operation of law. Instead, the notice of default was introduced as a preparatory step for the appeal. This structure ensures that stakeholders can seek justice without being unduly hampered by strict deadlines, which is essential for equitable treatment in cases where the inspector defaults.

The difference between the penalty payment and the appeal?

While the raison d'être for these two options is the same, the rules and the effect are not. Based on the above, we would like to provide the following considerations:

1. An appeal can be lodged earlier by ex officio decisions of the Inspector. As can be read above, a notice of default in these situations is not possible immediately after the expiry of the period. The Inspector must first be requested, then the notice of default and then the penalty payment. That first request is not a requirement when lodging an appeal.
2. An appeal process is costly in both time and money. This will often require the assistance of an advisor and the courts are already busy, so this may just cause more delays.
3. Only the penalty payment scheme entitles you to a penalty payment (logical) and it is more accessible because no court intervention is required.
4. The Inspector can choose to “simply accept” the penalty payment and still not make a decision. Overriding a court opinion, on the other hand, is a lot more difficult.