Dutch court urges action on tax bills after benefit back payments

A court in Groningen has urged benefit agencies and lawmakers to address cases in which people receive a tax bill after a delayed benefit payment, saying the tax authority should sometimes seek the money from the agency that withheld too little tax instead.

The call followed a case involving a woman who received a back payment from the Employee Insurance Agency (UWV) in 2023, relating to sickness benefit. The tax authority later billed her because the UWV had not withheld enough payroll tax.

The court found that the tax authority was legally entitled to impose the bill, but said it should have pursued the UWV instead. The shortfall should have been apparent in advance, the court said, and placing the bill on the agency would have been fairer under the principle of proportionality, which is intended to prevent excessive burdens on individuals.

The woman was assessed €1,111 and will receive €768 back. The court said similar problems occur in other cases involving benefit back payments, where recipients are paid too much by one agency and later have to repay money to the tax authority. It called on implementing agencies and lawmakers to find a solution.