The collection powers of the Tax Administration

Transcription

1 The collection powers of the Tax Administration Administrative collection process vs enforcement for collection Administrative collection process as effective mechanism for increasing revenues Arie van Eijsden

2 Contents Collection strategy Collection from private individuals: strategy and government claim Collection and businesses: strategy and crisis Overview legal powers Third party liabilities New methods: trust legislation New strategies: ANPR

3 Tax collection The collector has to work as efficient and effective as possible. So he shakes as long as neccessary until sufficient funds are cashed and the tax debt has been cleared.

4 Collection strategy NTCA makes a distinction between collection from: 1) Private individuals 2) Businesses NTCA pays relatively little attention to collection from private individuals staff dedicated to collection from businesses Compliance strategy in collection: NTCA is mild when possible and harsh when necessary. 4

5 Collection strategy private individuals Steps in case of non payment: Warning Reminder Distress Warrant Followed by recovery by means of: 1) a government claim and if this is unsuccessful: 2) a simplified garnishment by attachment against the bank, the employer or benefit institution, after which collection is finished. In general no other recovery measures BUT: the private tax debtor risks falling into the ANPR-trap. 5

6 Government claim private individuals (1) Negative effects of financial/economic crisis: 1) Tax claims are recovered with (increasing) difficulty 2) Less tax officials are available for collection activities. In short: with less workforce more labour has to be done, at least the same amount of tax has to be recovered. New measure: government claim 6

7 Government claim private individuals (2) On checking accounts including credit margin (max 3 months) Execution by automatic collection for tax debts of < 1000 The government claim amounts to a maximum of 500 each time The collector informs the taxpayer < 7 days The obligation of the bank to pay out expires immediately after execution Bank s authority to reverse payments (3 days) Bank makes notification on the statement account 7 Inter American Center of Tax Administrations CIAT

8 Government claim private individuals (3) Results from pilot project: Success for tax administration: payment in >50% cases Generally accepted and understood in society Automatic procedure officials only in certain cases Attractive and effective because of inclusion credit margin Relatively low amount (< 1,000) rarely affects social minimum 8

9 Collection strategy businesses Starting point with collection towards businesses: 1) NTCA is no money-lender 2) Banks ought to fulfill that task 3) In principle no suspension of payment agreement is granted in case of payment difficulties In principle because since the outbreak of the economic crisis a special crisis policy has been designed. 9

10 Collection strategy businesses Payment: - within legal terms - no payment: immediate recovery measures possible Key element: speed There are two options for the collector: 1) Seizure of the business assets + sale within a maximum of four months (use of third party liability is also possible). 2) Filing for bankruptcy of the tax debtor s business. 10

11 Collection strategy businesses Suspension of payment: - condition: full collateral for the outstanding tax debt (tax collector assesses collateral) - no collateral: always filing for bankruptcy Key element of strategy: NTCA does not finance businesses 11

12 Collection strategy businesses & crisis Temporary leniency: deferred payment agreement without collateral Conditions: 1) The business is viable proven by third party statement 2) The financial difficulties have been caused by the crisis 3) The financial difficulties are of a temporary nature 4) The tax debts can be fully paid after the period of suspension. 12

13 The tax collector: has his own tax bailiff system may, under certain circumstances, order immediate & full payment has the right to summary execution, without prior court approval may serve a writ of execution by sending it by post can use simplified garnishment with third parties can use a government claim can put unwilling taxpayers in prison can take measures against trusts can make use of 40+ extra third party liability provisions 13

14 Third party liability Liable for party VAT. And so on. Directors/perm. reps & liquidators Businesses hiring temporary staff Contractors (for subcontractors) Directors of incorporated bodies Directors Foreign athletes/artists Incorporated bodies in fiscal CIT-unity Disposers large blocks of shares Those transferring registered office Notaries/disposers beneficial ownership Participants in chain carrouselfraud Liability for all taxes wage tax & VAT wage tax wage tax, VAT, excise duties liability debts NL wage tax & VAT corporate income tax corporate income tax corporate income tax transfer tax VAT 14

15 New methods of enforcement: Trust legislation Case: scheme to hide assets in hybrid entity (trust funds, foundation, other forms of segregated private capital) in general: Trust From 2010: introduction of a new legal system: transparency of the trust: all gains of the trust taxed on the (Dutch) settlor. Consequences: 1. the settlor is the taxpayer for all gains of the (his) Trust 2. the Trust is liable for the settlors tax assessment 3. seizure of assets of the Trust, in the Netherlands and held by a third party (only in case of 5% or more in third party) Effects: preventative ; for example: dismantling of hundreds of trusts 15

16 New strategies to recover tax debts Annual non-recovery rate: 0,9% of all imposed tax assesments amounting to 2,000,000,000. Reasons: - Bankruptcy, - Persons who left without a trace and - Emigration to a country without a tax treaty with the NL - Consequence of focusing on businesses in collection NL strategy: finding new and creative ways to recover tax debts An example: private individuals and the ANPR trap. 16

17 ANPR: automatic number plate recognition Cooperation police, NTCA & other government bodies Mobile flashteam: automatically comparing number plates with database of the NTCA In case of tax debts: vehicle stopped and taxpayer given the choice: direct payment or walking home Effects: visibility (newspaper) and prevention 17

18 What can we learn from football? Football teams are aiming at perfecting their performance. In respect of our spirit of maximalisation of the proceeds of tax collection every time again we try to find new solutions to collect the full amount of outstanding tax debts. Like football players tax collectors should never give up. The slogan of the Rotterdam football club Fyenoord is clear: Actions speak louder than words 18

19 Questions?