Supreme Court rules against Ministry of Finance’s 2022 corporate tax interest hike

The Supreme Court has ruled that the Ministry of Finance was not allowed to increase the interest on business tax debts from 4 to 8 percent in 2022. The decision is expected to be costly for the treasury, as numerous companies have challenged the higher rate over the past few years.

According to the ministry, the total number of objections has risen to 29,500. Finance had earlier calculated that a favorable ruling for the objectors would cost the treasury at least 1.3 billion euros, but the figure is expected to be higher because of the extra appeals. “We will examine the ruling and assess its full impact,” a spokesperson said.

The case revolves around the interest companies owe when they pay corporate tax late, such as when tax returns are submitted after the deadline. In 2022, that interest rate was raised to 8 percent, even though rates for other taxes remained unchanged.

The Supreme Court ruled that the disparity violates the principle of equality. The court noted that the additional burden unfairly targeted a specific group of taxpayers without justification. For this reason, the interest increase was also deemed disproportionate.

Last year, former State Secretary for Fiscal Affairs Tjebbe van Oostenbruggen grouped all complaints about the tax interest under a so-called mass objection, with a final decision pending the Supreme Court’s ruling. The court now says that lowering the corporate tax interest back to 4 percent restores fairness, “without imposing an unjustified, selective increase in the burden.”