Provisional assessment 2018 and the payment discount
At the end of last month, the Tax and Customs Administration imposed provisional income and corporation tax assessments for 2018. The provisional assessment is based on income from the previous two years. The provisional assessment can be paid in two ways:
- in 11 equal monthly instalments;
- in one go: the Tax and Customs Administration then grants a payment discount.
The payment discount is an interest compensation for the period that the assessment is paid too early. The compensation is calculated on the basis of the recovery interest. The recovery interest is currently 4%. This interest will be higher than the interest you receive on your bank or savings balance. This could be a consideration for paying the provisional assessment in one go.
If you wish to take advantage of the payment discount, the full amount of the assessment minus the payment discount must be credited to the Tax and Customs Administration’s account no later than the first due date, i.e. 28 February 2018
The importance of a correct provisional stop 2017
If a request to amend a provisional assessment is made before 1 May 2018, this will in principle be imposed before 1 July 2018 (date of commencement of possible tax interest).
In order to avoid tax interest, we will review our client files in March to check, where possible, the correctness of the 2017 provisional assessments imposed. However, it is impossible for us to determine all provisional assessments correctly, as we often do not (yet) have all the information. That is why we urgently request our clients (herewith) to contact us in March if they feel that provisional assessments have not been imposed to the correct amount.
WOZ decision 2018
Soon you will receive the WOZ decision for 2018 from the municipality (value level date 1 January 2017). The WOZ value is an important factor for various (tax) regulations. For example, the WOZ value is important for the owner-occupied home allowance in box 1 and for the valuation of a second home in box 3. For gift and inheritance tax, the WOZ value also plays a role. In the case of companies, the WOZ value serves as a benchmark for the extent to which the property can be depreciated.
Check the WOZ decision properly. If the WOZ value seems to be too high, file an objection within 6 weeks after the date of the assessment notice.
When entering into a new interest rate contract with the bank, the bank looks, among other things, at the level of the WOZ value. In that case, a lower WOZ value can be disadvantageous. In that case, we advise you to have a valuation report drawn up. In principle, the costs of the valuation report required to enter into a new interest contract are deductible in your income tax return.
If the value of the dwelling has increased compared to the time when the mortgage loan was taken out, we advise you to ask your bank to reduce the risk premium on the mortgage loan.