The current tax assessment system allows for imposing income tax assessments up to 3 years after the end of the relevant tax year, which period may be extended to 5 years if new facts are discovered after a tax assessment was imposed. In the event a tax payer has acted in bad faith, a new fact is not required.
These periods may be extended with the time that postponements for filing of the tax return were granted. The assessment period is 12 years for income or gains derived from assets that are held abroad such as undisclosed foreign bank accounts.
In order to simplify the assessment system, the Ministry of Finance proposes a system where income tax assessments will be imposed within 3 months (simple tax return) or 15 months (complicated tax return) after receipt of the income tax return. The tax assessment is in principle a final assessment but an additional tax assessment may be imposed within 3 years after the income tax return was filed if after the "final" tax assessment has been issued, it appears that no or too little tax was levied. If a tax payer has acted in bad faith as a consequence of which no or too little tax was levied, an additional tax assessment may be imposed up to 12 years after the tax return was filed. The distinction between domestic and foreign assets will be scrapped. It is unclear how and why the Ministry of Finance arrived at the 12 year additional tax assessment period for domestic tax payers.