One article that has appeared every year for many years now concerns the annual legal challenge to the lawfulness of the flat-rate taxation of income from savings and investments (Box 3).
Pro forma objection
Our highest court, the Supreme Court, is clear on this: the flat-rate taxation in box 3 is not in order. But it is up to the legislature to rectify this.
This has been the subject of intense debate in The Hague, but a solution has yet to be found. Every year, the matter for that year is brought before the tax court again in a test case. This means that every year there is a chance that the court will decide to come up with a solution itself.
Anyone who pays tax on Box 3 and wishes to benefit from this decision must have safeguarded their rights by lodging a pro forma objection in good time. ‘In good time’ means that the objection must be lodged within six weeks of the date of the final income tax assessment.
Massive objection
Outgoing State Secretary Vijlbrief of the Ministry of Finance has already declared the mass objection procedure applicable to the objections relating to Box 3 for 2020. This means that, once the tax court of final appeal has dismissed the objections, all pending appeals on this matter can be rejected by means of a single decision.
It does not mean that, whenever the tax court rules against the Tax and Customs Administration, every taxpayer who paid income tax in box 3 for the year in question can benefit from the ruling. Only those who have safeguarded their rights by lodging a timely (pro forma) objection can do so.
A-G on 2016 and 2017
The Advocate General (AG) The Supreme Court has recently (once again) ruled, in relation to 2016 and 2017, that the flat-rate taxation in box 3 is incompatible with the prohibition of discrimination. However, once again, the Advocate General has recommended that the matter be left to the legislature to rectify. It therefore appears that taxpayers will once again be vindicated in respect of 2016 and 2017, but that this will not lead to a reduction in the tax paid.