Priority tax authority in bank garnishment?

A creditor may seek conservatory batter lay under a bank. The bank then blocks the amount currently in the bank account. That is ‘seized. If the garnishment becomes foreclosure, the creditor who placed the garnishment can claim this money. If there appear to be multiple creditors, the money is divided among the creditors in proportion to the value of each person's garnishment. Should the Tax Administration also be a creditor, however, things work slightly differently.

Taxpayer privilege

The tax authorities, pursuant to section 21 Recovery Act 1990 a general privilege over all the property of a debtor. The article in question still refers old-fashionedly to ’s Rijks treasury:

’The State Treasury has a privilege over all the property of the tax debtor.

This not only captures the imagination, but also has consequences for garnishers. This is because the tax authority can invoke its privilege even if another creditor has previously levied an attachment. The bank must comply with that privilege of the Tax Department and must then pay the amount of money affected by the attachment to the Tax Department.

What does this mean for the creditor?

This means that you as a creditor may be overshadowed by a claim from the Tax Administration. In such situations, the tax authorities have preference and a strong legal position in the collection of taxes. So when you have placed a prejudgment attachment, it can happen that the money does not remain in the account after all, because the tax authorities claim the amount. You often only find this out after you have obtained a title and are under the impression that you can claim the amount you have attached. A big disappointment.

What can you do about priority of taxation?

As a creditor, however, you can arm yourself against the taxman's privilege. This can be done by establishing a lien or right of mortgage. However, this can only be done in advance and not as an enforcement measure. If you provide financing or want to collect a debt, contact a attorney specializing in attachment and foreclosure law To get good advice. Otherwise, you may end up fishing behind the net.