Period to notify customs debt to be reduced from 5 to 3 years - the latest developments

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Period to notify a customs debt: what is the issue?

EU customs legislation provides that the notification of the customs debt – in the Netherlands: the issuing of the assessment (the ‘uitnodiging tot betaling’) – should take place within 3 years after the customs debt has been incurred. When the tax assessment is the result of an act which, at the time it was committed, was liable to give rise to criminal court proceedings, EU Member States should apply an extended assessment period with a minimum of 5 and a maximum of 10 years. The Netherlands has chosen to implement an extended assessment period of 5 years.

Until 1 May 2016, this extended assessment period of 5 years only applied to persons whose actions or omissions were aimed at evading customs duties with a certain degree of intent in accordance with Article 7:7 (2) of the General Customs Act (‘Algemene douanewet’). However, as a result of the abolition of this provision, the Dutch customs authorities could almost always apply the extended assessment period of 5 years. This is due to the fact that, under Dutch customs law, submitting an incorrect or incomplete customs declaration qualifies as an act liable to give rise to criminal court proceedings.

In practice, this was seen as unreasonable and undesirable due to the following:

• The ‘regular’ assessment period is almost never applied by the Dutch customs authorities, while it is arguable that the EU legislator intended to differentiate between situations where there is no intent or fault and where this is the case;
• This extended assessment period of 5 years gives more uncertainty to businesses;
• A request for repayment of customs duties is limited to a maximum period of 3 years, creating a disbalance between the period for repayment and the period for issuing an ‘uitnodiging tot betaling’.

The announced measures

On 19 September 2023, the Dutch government announced a partial adjustment to the sanctions system under Dutch customs legislation per 1 July 2024, whereby if someone:

• Not, incorrectly, incompletely or not timely files a declaration; or
• Not, incorrectly, incompletely or not timely provides certain information
  an administrative fine is to be imposed, thereby making the ‘regular’ assessment period of 3 years applicable.

However, if someone:

• intentionally files an incorrect or incomplete declaration; or
  
• intentionally not, incorrectly or incompletely provides certain information
  and if this leads to too few import duties being levied, the extended assessment period of 5 years remains applicable.

A transitional measure has also been announced, whereby the current rules remain applicable if the acts in question took place before 1 July 2021. This means that the envisaged change will not have retroactive effect. As a result, if an incorrect customs declaration was filed on 1 January 2020, a tax assessment could be issued by the Dutch customs authorities until 1 January 2025 even though there is no intent. On the other hand, if an incorrect customs declaration has been filed on 1 August 2021, the assessment period of 3 years will be applicable if there is no intent.

Lastly, it is noted that a general overhaul of the sanctions system under Dutch customs legislation is foreseen, but that this is expected to take a couple of years.

Business implications

This change could result in more frequent audits from the Dutch customs authorities (e.g. every 3 years instead of every 5 years) to align with the period of 3 years being applicable if there is no intent. It is also important to note that, due to this being only a partial adjustment of the sanctions system under Dutch customs legislation, there will remain situations in which the extended additional assessment period of 5 years will continue to apply in the Netherlands, also where there is no intent. Therefore, it is important for businesses to remain prepared for the application of the extended assessment period of 5 years by the Dutch customs authorities. If assessment are levied during the extended (5 year) period, we recommend to consider whether there is any merit in appealing the application of that extended term.

How we can help

Deloitte’s Global Trade Advisory specialists are part of a global network of professionals who provide specialised assistance in global trade and customs matters, including on issues relating to customs assessments. Our professionals can support in appealing customs assessments, as well as liaising with the Dutch customs authorities in this regard.

For more information about how the announced measures could affect your business, please contact one of our experts.