In our article Difficult policy decisions regarding Box 3 We outline the ideas that State Secretary Van Rij is discussing today in a committee debate. Van Rij has also outlined how income tax might be levied on income from savings and investments after 2022.
2023 and 2024
The current legislation, which was declared by the Supreme Court on 24 September 2021 to be contrary to European law, applies to all years up to and including 2022. For those years, legal redress will be provided as described in our article referred to above.
New (emergency) legislation will be required for the years after 2022. For the years 2023 and 2024, this will be based on the principles of the legal redress provided for the preceding years. The only difference is that the tax liability in 2023 and 2024 may be higher than would be the case under the statutory system for Box 3 (for the years up to and including 2022, the statutory system serves as the basis).
From 2025
A definitive new system must be in place by 2025. It appears that the decision will be to opt for a capital gains tax. Under this scheme, income tax is levied annually on regular income (interest, rent, dividends, leasehold payments, and so on). In addition, tax is levied on the realised and unrealised changes in the value of assets (such as capital gains or losses on shares, or increases or decreases in the value of property).
A major drawback of a capital gains tax is that taxpayers do not always have the liquid funds to pay the tax (for example, because the tax is levied on the increase in value of a holiday home that is used for personal purposes). Van Rij believes this can be resolved by granting a deferral of payment (for example, until the holiday home is sold).
The transition to the new system poses no problem for assets such as bank balances, securities and the like. In the case of property, however, matters are somewhat more complicated. For this reason, capital gains on property will initially continue to be taxed at a flat rate.
Interest on receivables and liabilities forms part of income, as do changes in value arising from write-downs, write-offs or exchange rate differences. Interest on a receivable is taxable; interest on a liability is deductible. How changes in value will be treated is still under review. The deduction of costs and the rules on loss set-off are also being examined in more detail.
Decision-making
We have outlined the State Secretary’s ideas. We will only know what form the scheme will ultimately take once the political process has been completed. Van Rij has indicated that he intends to submit a draft bill for public consultation online in the course of 2022. This draft bill would then be tabled in the House of Representatives before the 2023 summer recess. If the proposal is adopted by the end of 2023 at the latest, the new system could come into force on 1 January 2025.