Foundation’s officers taxed for asset withdrawal

The Dutch Tax and Customs Administration when performing an audit of the accounts of a foundation came across a considerable discrepancy – in the amount of 300,000-plus euros – between the theoretical and actual cash balances, which it went on to earmark as amounts having been withdrawn from the foundation’s assets by the foundation’s treasurer and chair, and by which it went on in halves to augment the two officers’ taxable incomes as per the latter’s income tax returns by way of “income from miscellaneous activities”.

The District Court ruled that the Tax and Customs Administration’s computation of the adjustment had been spot-on, anchored as it had been in the foundation’s (annual report cum) financial statements the preparation of which had been based on such bank and cash records as the treasurer had handed in. The Court found that it had indeed been the two officers who had withdrawn the cash resources from the foundation’s assets as they had access to the foundation’s cash, and in view of the fact that the treasurer and the chair enjoyed a virtually equivalent status within the foundation decided that it had been rendered sufficiently plausible that it had been the two officers acting in unison who had withdrawn the cash balance from the foundation’s assets, so that the allocation of half the relevant amount to each of them had been the right thing to do.