Netherlands Welcomes ECJ Judgement On Foreign Bank Accounts

by Ulrika Lomas, Tax-News.com, Brussels

25 June 2009

The Netherlands' Ministry of Finance has welcomed the European Court judgement of June 11 in favour of the Dutch Tax Administration in two cases involving taxpayers with money in foreign savings accounts. State Secretary for Finance De Jager noted the ruling's importance as a positive signal of support from the Court in the Netherlands’ fight against offshore savings.

One case concerned a person holding a bank account with the KB-Lux bank in Luxembourg. The other case concerned a taxpayer who had assets in a bank account in Germany. In both cases the Tax Administration, following the discovery of these foreign accounts, imposed additional assessments for the past twelve years. On March 12, 2009, the Supreme Court asked the European Court if the Tax Administration was allowed to impose additional assessments for so long a period given the usual 5-year recovery period.

The European Court has now ruled that the extended recovery period is justified.

De Jager commented:

“This judgment of the European Court significantly supports the Netherlands in tackling tax evasion using foreign channels. In most cases this type of tax fraud only surfaces years later. With the extended recovery period, fraudulent taxpayers will no longer be able to escape tax for years exceeding the 5-year period.”

“This is of particular importance in cases involving bank accounts held in banking secrecy countries, as appears not only from the present KB-Lux case, but also from the ongoing investigation project Bank Zonder Naam (Bank Without A Name) and the investigation of bank accounts held in Liechtenstein.”

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