The Tax Authority has received more than 10,000 notices of objection against 2013 income tax/ national insurance contributions assessments. These objections concern whether the flat-rate levy in box 3 on savings violates the European Convention for the Protection of Human Rights and Fundamental Freedoms (the ECHR). The box 3 tax still assumes a flat rate return of 4%, while the actual return on savings has now been well below 4% for several years.
In view of the large number of appeals and the expectation that a large number of appeals will also be filed for the year 2014, the Inland Revenue has issued the mass objection procedure declared applicable. This means that the (final) rulings of the tax court in the yet-to-be-designated (test) proceedings will apply to all assessments that were not yet irrevocable on the date of the decision (26 June 2015), even if no or no timely (pro forma) objection has been filed against them. Of course, this only applies to the legal question formulated in the decision. Taxpayers wishing to raise other points of dispute must still individually file timely objections.
Part of the Cabinet's proposals for tax reform is that the flat rate of return in Box 3 will be set per (type of) asset. Due to the breakdown of consultations on tax reform, it is unclear whether this change will be introduced.