Dutch Supreme Court Strikes Down 8% Corporate Tax Interest Rate

According to the Supreme Court, there are no reasonable justifications for imposing a selectively increased interest burden on corporate taxpayers alone. As a result, the relevant provision—Article 1(b) Bbi—is declared invalid and is not applicable. The cassation appeal by the State Secretary was dismissed.

Background of the Case

The tax authorities imposed a provisional assessment including interest calculated at 8% for the relevant period from 1 July 2022 to 26 August 2023, pursuant to the Bbi. The taxpayer objected, arguing that the imposed interest rate was excessively high. The District Court of Noord-Netherlands agreed, holding that the 8% rate violated the principle of proportionality. The Court reduced the applicable interest rate to 4%, which was then the standard rate applied to other taxes such as income tax and value-added tax. The State Secretary for Finance subsequently appealed directly to the Supreme Court by means of so-called “sprongcassatie”.

The Supreme Court confirmed the District Court’s judgment and held that the selective increase of the tax interest rate for corporate taxpayers lacks any reasonable justification. Imposing a higher financial burden solely on one category of taxpayers is disproportionate, breaching both the principle of proportionality and the principle of equality. Consequently, the tax interest has been reduced by the Supreme Court to the general rate of 4%, consistent with the rate applicable to other taxes.

The Supreme Court emphasized that the purported justification—linking the higher corporate interest rate to the commercial statutory interest rate—does not hold. A not-yet-formalized tax liability cannot be equated with a commercial receivable and therefore does not justify a higher interest rate.

Implications

This ruling has significant financial consequences, both for taxpayers and the Dutch Treasury. Corporate taxpayers who were charged 8% interest since 1 January 2022 are entitled to a recalculation at 4%, provided they filed timely objections or fall within mass-objection procedures. The Supreme Court also held that the minimum interest rate of 4.5%, which has applied since 1 January 2024, is not incompatible with the principle of proportionality. If tax interest has been charged on assessments that have already been issued and no objection has yet been filed, we recommend assessing whether it is still possible to lodge an objection against those assessments. We would be pleased to review the available options with you.

Link to the ruling: ECLI:NL:HR:2026:59, Hoge Raad, 24/04619