Tax interest 2020 and 2021 is now tax interest 2020, 2021

What is tax interest and how much will you pay in 2022 and 2023, as the tax interest will rise again. From January 1, 2013, the tax interest has expired and from now on we will talk about tax interest. Due to the corona crisis, the tax interest was reduced in 2020, but will increase sharply from July 1, 2023. And that is more than a name change. The interest that you must pay the tax authorities if you still owe tax, the collection interest, is also higher and is calculated differently. This levy and rate will change for both income tax and corporate tax. If you have to pay or receive tax. How is the tax interest calculated and what will it cost you on your 2022 and 2023 tax return? For income tax, corporate tax and inheritance tax. A real penalty interest for filing a tax return late or if you have to pay extra.

Pay tax interest and collection interest

Until recently, it could be advantageous to wait a while before paying your taxes, because the collection interest you had to pay was only 2% or 3%. Or it could be that you made money by not yet claiming back your overpaid tax, but waiting patiently until the tax authorities were ready to transfer the money to you. After all, you received back the excess tax from the tax authorities with a nice interest as a bonus. Saving with the tax authorities or borrowing from the tax authorities could therefore be very attractive.

Calculate tax interest for 2022 and 2023

But that has changed as of January 1, 2013. The government has introduced a new concept, changed the tax interest and the methodology for tax interest and collection interest. Due to the transitional law, the tax interest applies to the years 2012 and later. Anyone who files their tax return can therefore quickly have to deal with tax interest. The new tax interest applies to income tax and corporate tax. The predecessor of tax interest, the levy interest, was calculated over the period starting on the day immediately after the end of the tax year until the date of the tax notice. The tax interest, on the other hand, is calculated from July 1 of the year following the calendar year. So from July 1, 2023 for your 2023 tax return. The collection interest, the interest you had to pay, ran from the moment the tax assessment should have been paid. That will now be different:

  • You received the tax interest from the end of a tax year;
  • You paid the collection interest from the moment the tax assessment should have been paid;
  • You will receive the new tax interest from July 1 of the year following the tax year in question, but it is only collectible six weeks after the date of the tax assessment.
  • You pay the new collection interest on the first day after the tax assessment should have been paid.
  • In most cases, the interest on an additional assessment is calculated from July to the day preceding the day on which the additional assessment is due. This will then be one month after the date of the assessment.

Tax interest level

This will mean that this change in tax will be more beneficial for many people, because in many cases the tax assessment will be settled before July 1 of the following year. But if that is not the case, it can also be very disadvantageous if you have to pay extra money. The tax authorities then earn money from you because the tax interest is equal to the statutory interest, which for private individuals is 3% in 2013. In addition, no tax interest will be reimbursed if you successfully obtain a reduction in a tax assessment after an objection. As of 2013, the collection interest is also equal to the statutory interest. From April 1, 2014, this will be equal to 4% for private individuals. The tax interest is 4% for private individuals and 8% for an entrepreneur, more than the tax interest and collection interest in 2012 and 2011. The 4% tax interest for private individuals in 2014 is a minimum lower limit that is 1% point higher than the actual interest in 2013 (there was no lower limit then). The corona years are an exception to this, but from July 1, 2022 the Tax Authorities will normalize the levy again. So you will pay more interest.

Tax interest and inheritance tax return

Heirs may also have to deal with tax interest. The tax interest is calculated from the ninth month after death. Not for the first eight months, but remember that the Tax Authorities themselves need three and a half months to check your tax return and you have a month and a half for payment. This means that if you want to avoid tax interest, it is best to submit your tax return for inheritance tax no later than three months after death.

Corona and tax interest, 2022 and 2023

As a temporary measure, the tax authorities will reduce the tax interest to 0.01% for inheritance tax, corporate tax and taxes other than income tax from 1 June 2020. For income tax, this will take effect on July 1, 2020. If you file an inheritance tax return in the event of a death on or after January 1, 2017, no tax interest will even be calculated temporarily. All this lasts until December 31, 2021:

Tax interest percentage 2020, 2021, 2022 and 2023:

year

quarter 1

quarter 2

quarter 3

quarter 4

2023

4%

4%

6%

6%

2022

4%

4%

4%

4%

2021

0.01%

0.01%

0.01%

4%

2020

4%

4%

0.01%

0.01%

Tax interest conclusion for 2022 and 2023

The period during which tax interest is reimbursed on overpaid tax has become shorter, but the percentage has become higher and the requirements for reimbursement have been tightened. That is why the change from levy interest to tax interest will in many cases be beneficial for the tax authorities. The collection interest remains, but is also calculated over a shorter period. On the other hand, the interest rate is higher than was usual until now. In addition, the link to the statutory interest rate provides some stability, because the interest rate no longer has to be adjusted and announced every quarter.

read more

  • Tax authorities and corona: the tax measures