Weighing and determining treatment of corporate income tax (Vpb) returns

Dutch Tax and Customs Administration

Algorithm that helps assess whether a corporate tax return should be processed automatically or manually.

Last change on 13th of November 2024, at 12:11 (CET) | Publication Standard 1.0

• Publication category: Impactful algorithms
• Impact assessment: Field not filled in.
• Status: In use

General information

Theme

Public finance

Begin date

Field not filled in.

Contact information

[e-mail]

Link to publication website

https://over-ons.belastingdienst.nl/onderwerpen/omgaan-met-gegevens/algoritmeregister/

Link to source registration

https://over-ons.belastingdienst.nl/onderwerpen/omgaan-met-gegevens/algoritmeregister/wegen-en-bepalen-behandelwijze-aangifte-vennootschapsbelasting-vpb/

Responsible use

Goal and impact

The Inland Revenue receives almost a million corporate income tax (VpB) returns every year that have to be finalised within three years. It takes a lot of time to manually assess all the returns received each year. Therefore, an algorithm supports the Tax Administration in assessing whether a return should be processed automatically or manually. This is done with relevant data known to the Tax Administration.

Considerations

By using the algorithm, assessment can be done more carefully and efficiently. The algorithm contributes to systematic and accurate checking of declarations. By deploying an algorithm, declarations can be processed faster, giving businesses quicker clarity.

The algorithm determines the advice based on the relevant data. The alternative is for an employee to manually collect and assess the relevant data for all returns. This would make the process less efficient and more error-prone.

Human intervention

Human intervention means that human oversight of decision-making is substantial and carried out by someone who is competent and knowledgeable.

The operation of the algorithm involves human intervention, but decisions are also made by the algorithm. The algorithm detects, selects and makes decisions. In situations where the algorithm cannot make the decision (more complex situations), there is human intervention.

Risk management

The General Administrative Law Act requires the government's actions to be transparent and lawful (guarantee character). When applying and developing algorithms, the Tax and Customs Administration acts in accordance with general principles of good administration, such as the principles of equality, due care, justification, proportionality, legal certainty and trust.

The algorithm uses data collected under various tax laws. The use is permitted by law. As required by the AVG, no more data is used than necessary.

The use of the data is tested against the General Data Protection Regulation (AVG). This review against the AVG will highlight any privacy risks and allow appropriate measures to be taken. The AVG prescribes that no more data should be used than necessary. This is called data minimisation. The Tax Authority regularly examines whether the data used is still necessary and can therefore be used. No special personal data are used in the algorithm.

The selection rules and algorithms are tested against non-discrimination legislation. Processing as little personal data as possible reduces the risk of direct discrimination. Employees involved in developing and managing the algorithms receive training on data protection and prejudice. To minimise the risk of indirect discrimination, the Tax Administration conducts research on effects of the algorithms.

Legal basis

The collection and use of the data described above is regulated by the:

• Corporation Tax Act 1969
• Income Tax Act 2001
• Dividend Tax Act 1965
• General State Tax Act
• Archives Act 1995

Links to legal bases

• Wet op de Vennootschapsbelasting 1969: https://wetten.overheid.nl/BWBR0002672/
• Wet Inkomstenbelasting 2001: https://wetten.overheid.nl/BWBR0011353/
• Wet op de dividendbelasting 1965: https://wetten.overheid.nl/BWBR0002515/
• Algemene wet inzake rijksbelastingen : https://wetten.overheid.nl/BWBR0002320/
• Archiefwet 1995: https://wetten.overheid.nl/BWBR0007376

Operations

Data

• Personal data Basic Registration of Persons (BRP)
• Personal data Trade Register (KvK)
• Personal data
• Corporation tax return (Vpb)
• Income tax return (IH)
• Dividend tax return (Div)

Links to data sources

• Persoonsgegevens : Basisregistratie Personen (BRP)
• Persoonsgegevens : Handelsregister (KvK)
• Persoonsrelaties: Notariële akte
• Aangifte vennootschapsbelasting (Vpb): Belastingdienst
• Aangifte inkomensheffing (IH): Belastingdienst
• Aangifte dividendbelasting (Div): Belastingdienst

Technical design

The algorithm is manually built by humans, with the rules being created by humans based on laws and regulations and accumulated tax expertise.

The outcome of the algorithm is an advice: 'Automated Determine' or 'Handle' with the identified signals that need to be looked at by a competent and knowledgeable person. Read more about this under the heading: 'Human intervention'.

The algorithm is not self-learning. This means that the algorithm does not develop itself during its use.

The algorithm was developed at the Tax Administration itself and is maintained internally. The selection rules are reviewed periodically and adjusted if necessary to remain compliant with laws and regulations. Based on feedback and spot checks, the algorithm is checked in cooperation with the inspector to ensure that it always delivers sufficient quality.

External provider

The algorithm was developed in-house at the Inland Revenue and is maintained internally.