The North Holland District Court has ruled that, despite the fact that the appeal was lodged too late, the income in box 3 is capped at the actual return.
Christmas judgment
In the ruling now known as the ‘Kerstarrest’ case, the Supreme Court decided that the flat-rate calculation of income from savings and investments (Box 3) from 2017 onwards is contrary to European law. Tax may be levied only up to the amount of the actual return generated by the assets subject to tax in Box 3.
Objection
Anyone who has lodged a timely objection to a final income tax assessment may rely on this judgment. A timely objection must be lodged within 6 weeks of the date of the final assessment.
Anyone who has not lodged an objection (or has done so too late) may submit a request to the Tax and Customs Administration for an ex officio reduction in their tax assessment. The basic principle is that such a request will not be granted if it is based on new case law.
Naturally, a debate has erupted both in tax literature and in political circles as to whether tax assessments under Box 3 should, after all, be reduced ex officio. The District Court of North Holland has taken the first step in this direction by itself granting redress, despite the fact that the objection was lodged after the six-week deadline had expired.
The Tax and Customs Administration has, of course, lodged an appeal against the court’s ruling.
Actual return
As in the Kerstarrest case, there is no dispute in the proceedings before the District Court of North Holland as to what the actual return achieved is.