At the end of last year, the highest court in the Netherlands, the Supreme Court, ruled on the (unreasonable) taxation in Box 3. In principle, this judgment means that, according to the Supreme Court, the tax method (the so-called “fixed asset mix”) in Box 3 for the years 2017 and 2018 is discriminatory. For the years 2017 and 2018, the Supreme Court has now decided that ultimately only the lower actual return may be included in the Box 3 levy. A breath of fresh air!
But what does this effectively mean for you?
This judgement not only has consequences for the years 2017 and 2018 (in most cases these years are now final), but- more importantly- also for the following years.
On February 4, 2022, our State Secretary of Finance granted all objection procedures regarding box 3 (“mass objection procedures”) for the years 2017 to 2020. The manner in which legal redress will be provided in accordance with the judgment of the Supreme Court is currently still being worked out and will be announced by 1 May 2022 at the latest.
Those who have entered into such an objection procedure for these years do not need to take any further action; they will automatically receive notification from the tax authorities. However, the majority of residents have not joined these so-called “mass procedures”. The question now is, how should they act now? It has been announced that the cabinet will also make a decision for them by 1 May at the latest.
In anticipation of this, any outstanding income tax assessment with Box 3 income whereby the actual return was lower than the deemed return, must in any case be appealed within six weeks of its date. This is also important for income tax assessments still to be received.
Moreover, it will soon be tax return filing time again; the calendar year 2021 will have to be reported in the individual income tax. The question now is how the judgement of the Supreme Court should be taken into consideration in practice?
In principle, the decision of the Supreme Court has not yet been incorporated in the tax return form/software for the 2021 tax year. For the time being, the advice is to declare the income in Box 3 in the usual way. It is the intention that the tax authorities will subsequently impose an 2021 assessment in accordance with the decision of the Supreme Court. Failure to do so will in any case require you to file an objection. Of course we are very happy to be of service to you in this regard.