Tax Inspector was not permitted to anticipate an increase in the interest on tax rate

Article 1 of Protocol No. 1 to the ECHR vs. the principle of proportionality

The interest on tax scheme, which came into force on 1 January 2013, essentially means that the Tax Inspector charges interest on tax if the imposition of a tax assessment with an amount payable by the taxpayer is unduly delayed due to the taxpayer’s own actions. Conversely, the Tax Inspector reimburses interest on tax if they take too long to determine a refund.

This case concerns both the statutory minimum rate of 4% for other levies in the period 1 July 2017 to 1 July 2020, and the corresponding interest rate in Article 1(a) of the Interest on Tax Decree (Besluit belasting- en invorderingsrente), which came into force on 1 October 2020. In December 2025, Advocate General Koopman had already concluded that the ‘fair balance’ of Article 1 of Protocol No. 1 to the ECHR had not been violated at the systemic level. At the same time, he indicated that the scheme in force since 1 October 2020 might well be contrary to the principle of proportionality, as the 4% minimum contains an element of arbitrariness.

However, the judgment handed down on 16 January 2026 concerning the high rate of interest on corporate income tax shows that the Supreme Court does not make this distinction. Referring to this judgment, the Supreme Court therefore ruled that the minimum interest rate of 4% does not contravene Article 1 of Protocol No. 1 to the ECHR nor the principle of proportionality.

Principle of legality

Another significant issue at stake in this case is whether, when issuing an interest decision, the Tax Inspector may anticipate an interest rate increase that, although announced, had not yet come into effect at the time of issuing that assessment. This is important because interest on tax is charged up to the date on which the tax due under a tax assessment becomes payable.

In this case, the Tax Inspector issued an interest decision on 26 September 2020, applying 4% interest on tax for the period from 1 October 2020 to 20 October 2020. However, the amendment to the Interest on Tax Decree to that effect was not published until 30 September 2020 and came into force on 1 October 2020. The Supreme Court ruled, in line with Advocate General Koopman, that the constitutional principle of legality (Article 104 of the Constitution) and Article 1 of Protocol No. 1 to the ECHR preclude this. This is not altered by the fact that the change in interest rates had already been announced. The interest on tax charged was reduced to 0.01% (the rate applicable to income tax during the period 1 July 2020 – 30 September 2020).

The general rule is that the levying of tax and the calculation of interest on tax are not permitted if the relevant legislation has not yet entered into force at the time when the tax is levied or the interest is charged. This applies both to the introduction of new legislation and to the extension of existing options for levying tax or calculating interest, for example as a result of an interest rate increase. An exception to the principle of legality applies only if it follows from an Act of Parliament (wet in formele zin) that a legal basis is granted with retroactive effect to actions previously taken by the Tax Inspector. However, that is not the case here. The Interest on Tax Decree is not an Act of Parliament but rather an order in council (algemene maatregel van bestuur). Furthermore, the interest rate increase as of 1 October 2020 has not been implemented with retroactive effect.

Tax practice consequences

In light of the above, we would also note that the aforementioned restrictions do not apply if existing legislation leads to a change in the interest on tax rate. In the Interest on Tax Decree, the level of interest on tax is linked to the most recent ECB main refinancing operation that took place before 1 November of the preceding calendar year, plus a surcharge of 3%. If this system leads to a change in the interest on tax rate as of 1 January of any year, the Tax Administration can readily take this into account when determining an interest decision.  

• Supreme Court 10 April 2026, 25/02195, ECLI:NL:HR:2026:591