Box 3 restoration of rights and bridging legislation
Following the Christmas judgment of the Supreme Court, Box 3 taxation has to change. In addition, all objections that are part of the mass objection procedures against the Box 3 taxation for 2017 to 2020 have been declared well-founded. The Dutch government will use the so-called flat-rate savings option (forfaitaire spaarvariant) to calculate the compensation.
What is the flat-rate savings option?
The government investigated how the restoration of rights imposed by the Dutch Supreme Court can take place. They opted for the flat-rate savings option. The amount is still based on a fictitious return, but based on the actual composition of assets, broken down into three categories:
- Savings will be taxed on the average interest rate on savings in the year of question
- Debts are linked to the market mortgage rate
- Other assets are based on the long-term average return for investments
Calculation of the compensation
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Savings | 0.25% | 0.12% | 0.08% | 0.04% | 0.01% |
| Debts | 3.43% | 3.20% | 3.00% | 2.74% | 2.46% |
| Investments | 5.39% | 5.38% | 5.59% | 5.28% | 5.69% |
Tax-free capital
In 2021, there was a tax-free capital of €50,000 in the Netherlands. Due to the new calculation, this exemption can no longer be used in the old way. Instead, the plan is that the following amount will be deducted from the fixed return:
exemption x (calculated return / box 3 capital)
The tax rate will remain the same: for the years up to and including 2020, this was 30%. In 2021 and 2022, this is 31%.
Automatic restoration of rights Box 3 2017 until 2022
With the flat-rate savings option, the government is trying to get as close as possible to the actual return. There are three groups that automatically qualify for the flat-rate savings option:
- You are part of the massive objection procedure for the years 2017 to 2020.
- The income tax assessment for the years 2017, 2018, 2019 and/or 2020 had not been irrevocably established on the 24th of December 2021.
- All taxpayers for the years 2021 and 2022.
If the new fixed return (based on the flat-rate savings option) is less than that of the previous system, the amount of box 3 tax will be reduced. If you have investments next to your savings, there’s a good chance that the new calculation will turn out unfavorable. Fortunately, for the years up to 2022, the old calculation will be applied if the recalculation works against you.
Future Box 3 taxation
The bill on the restoration of rights in Box 3 will become part of the Tax Plan 2023, which will be announced on Budget Day.
Bridging legislation for 2023 and 2024
The government proposes that the flat-rate savings option, as explained in this article, will also form the basis for the temporary design of box 3 in 2023 and 2024. Do you have investments? Then there is a good chance that the fictitious return will be higher from 2023. In 2023, the old system expires and can no longer be used.
From 2025: taxation based on actual return
As of 2025, a new Box 3 system will be introduced. The Dutch tax office will levy tax on capital gains. In this system, tax is levied on income (such as rent and dividend) and asset growth (such as gain/loss of shares and value increase/decrease of real estate).
Help with your Box 3 taxation?
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