Punitive tax penalties in the Netherlands: when can the inspector impose one — and when not?

A punitive tax penalty — in Dutch: vergrijpboete — is an administrative penalty that the inspector may only impose if he proves that you underreported or underpaid tax with (conditional) intent or gross negligence. It typically amounts to 25% to 100% of the underpaid tax. That sounds threatening, and unfortunately it is. But the burden of proof rests entirely on the inspector, and the bar is high. In practice, these penalties are regularly struck down in court. Challenging one is therefore often worthwhile.

Quick answer: when may the Dutch tax authorities impose a punitive penalty?

Only if the inspector convincingly demonstrates (the Dutch “doen blijken” standard) that you acted with (conditional) intent or gross negligence. If he cannot, there is no penalty — even where the additional tax assessment itself is justified. The penalty is normally 25% to 100% of the underpaid tax; for concealed Box 3 assets it can reach a statutory maximum of 300%. Strong defences include the objectively arguable position (pleitbaar standpunt), reliance on a competent adviser, and a critical challenge of the evidence.

A punitive penalty is exactly what the name says: a punitive sanction for conduct the legislator considers seriously culpable, such as deliberately filing an incorrect tax return. That makes it fundamentally different from a default penalty (verzuimboete), which you receive, for example, for filing your return late. With a default penalty, your degree of fault barely matters; it is a fixed amount and a slap on the wrist. With a punitive penalty, the inspector must first prove something about your conduct and your knowledge. If he cannot, there is no penalty. At its core, it is that simple.

When can the Dutch tax authorities impose a punitive penalty?

The law contains several legal bases, each with its own conditions. The most important ones at a glance.

Incorrect or missing return for assessment-based taxes (art. 67d AWR)

This concerns personal income tax and corporate income tax: taxes levied by way of an assessment. When imposing the assessment, the inspector can add a penalty if the return was deliberately incorrect or incomplete. Note: only intent suffices here. Gross negligence is not a basis under this provision. Someone who was careless but did not act deliberately cannot be penalised on this ground.

Assessment set too low due to intent or gross negligence (art. 67e AWR)

The classic reassessment situation. The assessment had already been finalised, it later turns out too little tax was levied, and the inspector issues an additional assessment. If that is attributable to your intent or gross negligence, he can add a punitive penalty. In practice this is the most common variant, particularly with concealed foreign assets.

Failure to pay (on time) self-assessed taxes such as VAT and wage tax (art. 67f AWR)

For taxes you must both report and pay yourself, a penalty can follow if the tax was not paid, not paid on time, or underpaid due to intent or gross negligence.

A current development: on 20 February 2026 the Dutch Supreme Court (Hoge Raad) ruled that art. 67f AWR provides no basis for a punitive penalty where the additional assessment rests solely on the denial, due to fraud, of the VAT zero rate for intra-Community supplies. The intent or gross negligence must be directed at the non-payment of VAT due in the Netherlands; intent aimed solely at evading VAT in another Member State is insufficient. The Supreme Court explicitly reversed its earlier case law on this point (ECLI:NL:HR:2026:279). For businesses with cross-border VAT positions, this is an important judgment.

Incorrect provisional assessment or revision (art. 67cc AWR)

If you deliberately provide incorrect information when requesting a provisional assessment (or its revision), you also risk a punitive penalty. Here too: intent only.

Finally, good to know: the penalty can hit more than just the taxpayer. A co-perpetrator, such as an adviser, or a de facto director, such as a board member or director-major shareholder (DGA), can also be penalised personally. The Dutch tax authorities have been using this option more actively in recent years.

The requirements: intent, conditional intent or gross negligence

This is where the case is decided. Without proven intent or gross negligence there is no punitive penalty, however large the correction.

What is (conditional) intent?

Intent means acting or failing to act knowingly and deliberately. It also covers conditional intent: you saw the significant likelihood that too little tax would be levied, and you consciously accepted that risk. That word “consciously” is essential. “Should have known” or “could have suspected” is not intent, as the Supreme Court made clear once again on 8 April 2022 (ECLI:NL:HR:2022:526). The inspector must demonstrate what you actually knew, not what you ought to have known. The distinction seems subtle, but penalties fail on it.

What is gross negligence?

Gross negligence (grove schuld) is a degree of culpability bordering on intent: serious carelessness, reprehensible inattentiveness. Ordinary sloppiness is not enough. A bank account forgotten in your return can constitute gross negligence, but by no means has to; it depends on the circumstances, and the inspector must substantiate those concretely.

The inspector's heavy burden of proof (“doen blijken”)

Since the Supreme Court judgments of 8 April 2022 and 13 January 2023, the rule is: the inspector must convincingly demonstrate intent or gross negligence (“doen blijken”), not merely make it plausible (ECLI:NL:HR:2022:526 and ECLI:NL:HR:2023:26). That is the heaviest standard of proof known to Dutch tax law, comparable to “beyond reasonable doubt” in criminal law.

Moreover, the penalty stands apart from the assessment. Even where the additional assessment itself survives — including where the amount of tax was established with reversal and aggravation of the burden of proof — the burden of proof for the penalty remains fully on the inspector. The Supreme Court recently confirmed that the aggravated burden of proof for the punishable conduct rests on the inspector, even where the burden of proof for the tax itself has been reversed (HR 10 October 2025, ECLI:NL:HR:2025:1500). And in judging whether the penalty is appropriate, the court must take into account that the tax base was determined under a reversed burden of proof (HR 18 January 2008, ECLI:NL:HR:2008:BC1962). What is held against you for the tax itself does not automatically count against you for the penalty.

You see this effect in the case law of the lower courts. In early 2025 the Court of Appeal of 's-Hertogenbosch quashed a punitive penalty because the inspector could not convincingly demonstrate intent or gross negligence (ECLI:NL:GHSHE:2025:523), and in mid-2025 the District Court of Gelderland struck down a penalty for de facto directing on comparable grounds (ECLI:NL:RBGEL:2025:4322). We see the same pattern in our own practice: many penalty files are built on presumptions and assumptions, and under this standard of proof those by no means always hold up.

Notification and rights of defence

Because the punitive penalty qualifies as a “criminal charge” within the meaning of Article 6 ECHR, you have additional rights.

In practical terms: the inspector must notify you in advance of the intention to impose a penalty and of the grounds for it. You have the right to remain silent insofar as questions concern the penalty, and the inspector must point this out to you (the caution). Statements given under compulsion may not simply be used for the penalty; that is the core of the nemo tenetur principle. And the una via principle prevents you from being both fined and criminally prosecuted for the same offence.

Practical tip: received a notification? Do not respond on reflex. Whatever you write or say at this stage goes into the file — and can later be used against you for the penalty.

How high is a punitive penalty?

The law mainly sets maximums (usually 100% of the penalty base). The Administrative Penalties Decree (Besluit Bestuurlijke Boeten Belastingdienst, BBBB) gives the inspector practical guidelines:

• Gross negligence: 25% of the underpaid tax.
• Intent: 50%.
• Aggravating circumstances (such as recidivism or deceit): up to 100%.
• Concealed Box 3 assets: increased percentages of 75% (gross negligence) and 150% (intent), with a statutory maximum of no less than 300%.

Aggravating and mitigating circumstances

The percentages are a starting point, not the end of the road. The penalty must be “appropriate and warranted” in your case, and the court reviews this independently. Mitigating factors can include your financial circumstances, a disproportion between the penalty and the actual reproach, and the procedure exceeding a reasonable duration (where proceedings take too long, the penalty is reduced as a matter of course). It is usually worth contesting the amount of the penalty separately, even where the reproach itself is hard to dispute.

Challenging a punitive penalty: what are your chances?

Better than many people think. A few main lines of defence.

Objectively arguable position (pleitbaar standpunt)

If the position taken in your return was objectively arguable in light of the law, case law and literature at the time, a punitive penalty is excluded. Even where the correction itself stands: with an arguable position, the penalty must be cancelled (HR 23 September 1992, ECLI:NL:HR:1992:ZC5105). The test is objective: what matters is whether the position was defensible by objective standards — not whether you personally believed in it at the time, nor whether it reflected the prevailing doctrine (HR 21 April 2017, ECLI:NL:HR:2017:638).

This is a strong defence in disputes over questions of qualification, valuations and structures on which reasonable minds can differ.

Reliance on a competent adviser

Anyone who engaged a competent adviser and had no reasonable cause to doubt that adviser's diligence is not guilty of intent or gross negligence. You are not required to delve into the substantive aspects of your return yourself (HR 13 February 2009, ECLI:NL:HR:2009:BH2586). This defence succeeds regularly in practice — and it underlines why it is wise to have tax matters handled by a specialist.

Challenging the evidence

In penalty files, the inspector often works with cash-flow reconstructions, net-wealth comparisons and evidentiary presumptions. For the tax assessment that may suffice; for the penalty, by no means always. In opinions from 2024 and 2025, the Advocate General at the Supreme Court has argued for minimum evidentiary requirements in penalty cases. Critically probing what has actually been proven belongs in every penalty defence.

Objection, appeal and mitigation

You can file an objection against a punitive penalty within six weeks, and subsequently appeal to the courts. As long as you contest the penalty with reasons, you are in principle not required to pay it yet. Courts scrutinise these penalties intensively, precisely because of their punitive character. Experience shows that a well-substantiated objection often already leads to cancellation or substantial reduction, without a court needing to get involved.

Preventing a punitive penalty: voluntary disclosure and VAT correction returns

No penalty yet, but you know something is wrong in earlier returns? Then acting quickly is key. Anyone who voluntarily corrects before they know or should reasonably suspect that the inspector is on the trail of the error can have a punitive penalty reduced or even avoided. For VAT, the correction return (suppletie) serves this purpose and, if filed in time, has a mitigating effect.

One caveat: the voluntary disclosure scheme (inkeerregeling) has been scaled back since 2020. For Box 2 and Box 3 income, disclosure no longer automatically leads to impunity. Even so, voluntary correction is almost always more favourable than waiting for the tax authorities to come to you. Seek advice beforehand on the right route and wording; a disclosure notification is itself part of the file.

Our analysis: the penalty file is not the assessment file

The common thread in the penalty cases we handle: since the Supreme Court raised the standard of proof to “doen blijken” in 2022 and 2023, the working methods of the Dutch tax authorities have not everywhere changed with it. In our experience, penalty files are still regularly built like assessment files: on cash-flow reconstructions, net-wealth comparisons and presumptions that may suffice for the assessment, but not for the penalty. The judgment of 20 February 2026 on the art. 67f penalty fits the same pattern: where the levy may be interpreted broadly, the penalty provision is strictly confined by the principle of legality.

For practice, this means two things in our view. First: treat the penalty as a separate file from the very first notification, with its own evidentiary question — what has been convincingly demonstrated about what you knew and intended? Second: the moment before your first response to the inspector is the most important moment in the process. Statements that seem logical and helpful in the assessment sphere can work against you in the penalty file. No defence offers certainty in advance — the outcome depends on the facts and on the inspector's position — but the case law of recent years shows that critically testing the evidence is worth the effort.

Received a notification or a punitive penalty decision?

The common thread of this article: a punitive penalty requires heavy proof from the inspector, and a well-conducted defence regularly succeeds in practice — although the outcome always depends on the facts of your case. The stage you are in determines your options. What you say or write to the inspector before seeking advice cannot be taken back.

Have you received a notification, a penalty decision or an announcement of a tax audit? Do not respond to the inspector yourself before seeking advice. Feel free to contact Port Sight Tax for a no-obligation consultation. Please note: Port Sight Tax advises on Dutch tax law; for questions of US or other foreign law we work with, and gladly refer you to, partner firms in the relevant jurisdiction.

This article contains general information and does not constitute advice for your specific situation. No rights can be derived from its contents. Last updated: July 2026.