A taxpayer argues that the Box 3 tax is invalid because the law does not specify an explicit date on which the income is deemed to have been received. He argues that, in the absence of a statutory provision establishing when the income is deemed to have been received, it cannot be taxed. The court rejects this argument. The moment of realisation is implied by the reference date of 1 January. A separate provision is not necessary.
Substantial wealth in property
The man is filing his 2021 income tax return with Box 3 income of over thirty thousand euros. His assets consist mainly of immovable property worth nearly 3.4 million euros, supplemented by bank and savings balances and a share portfolio. After deducting debts, the taxable base amounts to just over nine hundred thousand euros. The tax assessment is issued in accordance with the return. Application of the Box 3 Legal Redress Act does not result in a lower tax benefit.
A missed moment of enjoyment?
The man is lodging an appeal on the basis of a remarkable argument. For Box 1 income, the law explicitly stipulates when that income is received. No such provision exists for Box 3. The man argues that, without a legally defined point at which the income is deemed to have been received, the tax base is unclear and the income cannot be taxed. He invokes the European right to property, the EU Charter and various legal principles such as the principle of legality and the principle of legal certainty.
The reference date is the date of stapling
The court swiftly dismisses this argument. It follows from the law that income tax is levied on income from savings and investments received in a calendar year. That income is determined on a flat-rate basis according to the tax base as at 1 January of the calendar year. The tax base is therefore clear. A separate provision regarding the point in time at which income is deemed to have been received is not necessary. The court finds support in the Kerstar judgment, in which the Supreme Court ruled that the flat-rate system is intended to levy tax on income received by the taxpayer. The Supreme Court did not consider a separate point in time for realisation to be necessary.
Charter does not apply
The reliance on the EU Charter also fails, but for a different reason. The Income Tax Act 2001 is not intended to implement EU law. Consequently, the Charter does not apply in this case and the man cannot rely on it.