The Tax and Customs Administration states on its website that the implications of the Supreme Court’s ‘Kerstar’ judgement have not been taken into account in the provisional income tax assessments for 2022.
Provisional assessment
The provisional income tax and national insurance contributions assessments for 2022, which include the amount of tax due, will soon be arriving in the post (or via digital channels). These assessments are usually dated 31 January 2022. The amount due must then be paid by 28 February 2022 at the latest. Payment in instalments is possible.
The provisional tax assessments, which show the amount of tax due, have already been issued. The payment will be made in 12 instalments, the first of which you will receive in January 2022.
Christmas judgment
By the ‘Christmas judgement’, we mean the judgement handed down by the Supreme Court on 24 December 2021 concerning Box 3. See our article Supreme Court ruling box 3 levy. Given the date on which this judgement was handed down, it stands to reason that its implications have not been taken into account in the provisional tax assessments for 2022. As there are millions of tax assessments involved, the process leading up to the tax notice that lands on your doormat began months ago.
Action?
The Tax and Customs Administration states that no action is required. This is because the implications of the ruling will be taken into account in the final tax assessment. This makes sense, as the provisional assessment is always offset against the final one. However, this means you would have to pay now and then wait quite a while for a refund of the overpayment. The final tax assessment for 2022 will be issued in May or June 2023 at the earliest, provided you ensure your tax return is submitted by March 2023.
If you don’t want to wait that long for your money, you can ask the Tax and Customs Administration to reduce your provisional assessment. This request can only be made electronically. VWG can take care of this for you. You can also do it yourself via MyTax Office.
The problem is that the exact implications of the ‘Kerst’ ruling are not yet clear. If your income in box 3 consists solely of bank accounts, it is clear that your actual return is limited to the interest received. This will amount to nothing (or very little) in 2022. Negative interest rates will not result in a tax refund.
However, for many other assets, it is far less clear how the taxable return should be determined. In such cases, the most obvious course of action is probably to pay the tax shown on your provisional assessment and wait to see how things develop. It is not always a bad thing to overpay tax on your provisional assessment: you do not pay negative interest on money you deposit with the tax authorities.
Tax return for 2021
All of this naturally applies to 2021 as well. Provisional tax assessments have also been issued for that year, which may be too high as a result of the ‘Christmas’ ruling. We will, however, soon be submitting the tax returns for 2021. See our article 2021 Income Tax Return