In 2023, a man and a woman have only bank and savings balances totalling €229,802. They receive €1,575 in interest on these balances during the year. The tax authorities set the taxable income from savings and investments (Box 3) at €1,065. The man believes this amount should be lower and cites the Supreme Court’s so-called ‘Kerstar’ ruling in support of his claim.
Tax-free allowance
The man argues that the tax-free allowance must be taken into account when calculating the actual return. According to his calculation, therefore, only part of the interest received should be taken into account. He arrives at a taxable income from savings and investments of €793 instead of €1,065.
Flat rate of return
The court does not share this view. According to the court, the Supreme Court makes it clear in its judgment of 6 June 2024 that, when determining the actual return, the full return achieved on the capital must be taken as the basis. No reduction is made on account of the tax-free allowance. This means that, in this case, the full amount of €1,575 in interest received counts as the actual return. As the flat-rate return is lower than the actual return achieved, this is not a situation in which the taxpayer is taxed more heavily than his actual income.