Dutch supreme court to deliver box 3 rulings on June 6

June 3, 2024

The Dutch supreme court has announced that it will deliver its rulings regarding the income tax levies under box 3 on June 6. This decision comes much earlier than anticipated, as initial expectations suggested the verdicts would be delivered around late August or September this year.

The supreme court previously declared the Box 3 system of notional returns for tax assessment invalid in its landmark 'Kerstarrest' ruling at the end of 2021. In response, the government introduced a remedial law providing restitution for affected taxpayers for the period from 2017 to 2022. Additionally, the government is working on a new system for box 3 taxation, aimed at taxing actual returns. The target for implementing this new system is 2027, although this depends on the incoming cabinet. In the interim, the Overbruggingswet (Transitional Law) box 3 remains in effect.

Actual returns

Numerous legal cases are currently challenging the remedial law. The crucial issue the supreme court will address on June 6 is whether taxpayers should only be liable for box 3 tax on their actual returns if these are lower than the notional returns under both the remedial law and the prior legislation from 2017-2022.

Should the supreme court align with the conclusions of Advocates General Wattel and Pauwels, which would deem the current Box 3 law invalid, taxpayers would need to be given the opportunity to prove their actual returns. The Dutch Tax Office has already prepared for this possibility by creating a digital form for taxpayers to declare their actual returns.

The supreme court's decisions will be broadcast live via a livestream on the supreme court’s homepage.