For years, the Dutch government has taxed savings as though they were making an assumed rate of return – even though high savings in banks currently incur a negative rate of interest.
But now the state Secretary of public finances Marnix van Rij has announced that approximately 60,000 people who officially protested that their box 3 tax didn’t match actual income from their assets, will get a refund.
If, however, you paid too much tax on your assets on or after 2017 but did not make a formal protest, then you will receive nothing.
In its spring budget, the government has decided only the people who made an objection to Box 3 taxes will get a refund – which will cost the state an estimated €3.6 billion (rather than four times as much). The refund covers the period from 2017 to 2022, but also the 2023-24 tax year, before an official new savings tax rate is introduced.
It is a result of a court case dating back to 2017. At the end of last year the Supreme Court said the tax on assets in box 3 conflicted with European human rights treaties – because the government assumed it was invested in a certain mix of assets and cash and had a fictional rate of return, even if this was factually incorrect.
‘Everybody who made an appeal will get a refund, but it’s bad luck for other people who also wanted a refund,’ says a Blue Umbrella expert. ‘This may not have been beneficial for the Dutch tax office or the general taxpayer in any case.’
People filing their tax for 2021 and 2022 can expect things to be put on hold in terms of taxes on savings, although they should receive benefits such as the mortgage interest rate tax relief..
‘If you get a refund because, for example, you have a mortgage, then the tax office will pay this refund in accordance with your income tax filing. From the 1st of August 2022, they will send you a revised assessment with the new regulation of box 3 incorporated.’ says the Blue Umbrella adviser.
While people who had tax in savings were particularly unfairly affected by the old box 3 tax, however, the super-rich with money in assets and property will no longer benefit from a lower tax than their actual rate of return.
There are actually 48 ‘fictional’ tax rulings in the Netherlands, but the government should ensure that they are regularly checked against reality, according to the Algemene Rekenkamer regulator.