The Supreme Court has decided today that the Tax and Customs Administration is not required, on its own initiative, to grant redress to people who have not lodged an objection, or have lodged one too late, against their income tax assessments that include income from savings and investments (Box 3).
Objection lodged too late
The case concerns a taxpayer who lodged an objection against the income from savings and investments included in income tax assessments issued for the years 2015 to 2018 inclusive. However, this was done after the deadline for lodging an objection had already expired. This means that the taxpayer’s objection is inadmissible. The Tax and Customs Administration treats the objections as requests for an ex officio reduction, but subsequently rejects these requests.
Christmas judgment
This comes as no surprise for the years 2015 and 2016, given that the Supreme Court ruled for those years that, whilst the tax on income from savings and investments was unlawful, the matter of redress was left to the legislature. In the Christmas judgment However, the Supreme Court did grant this redress for the years 2017 and subsequent years.
However, an ex officio reduction of final tax assessments is only possible if:
- the inaccuracy in the tax assessment is not apparent from subsequent case law; or;
- the Ministry of Finance to refund the tax ex officio after all.
The Supreme Court has ruled that the ‘Kerstar’ judgement must indeed be regarded as new case law. Consequently, the requests for an ex officio reduction were rightly rejected, and those who did not lodge an objection must now turn to the Ministry of Finance. The coming weeks will reveal whether there is a willingness to compensate taxpayers after all. Opinions are divided in political circles, with the main issue being where the budgetary funding for the compensation is to come from.
To be continued ….