On 10 July 2015, the Supreme Court ruled in the test case in which farmers revalued the land forming part of their business assets in accordance with the WEVAB (the market value for agricultural use). The reason for the voluntary revaluation lay in the rumours that emerged five years ago regarding the abolition of the agricultural exemption, under which capital gains on agricultural land are exempt from income tax and corporation tax until the WEVAB.
According to the Supreme Court, the agricultural exemption is intended to exempt changes in the value of agricultural land, insofar as these changes in value are actually realised. If changes in value that have not yet actually been realised were to be treated as falling under the agricultural exemption, changes in value arising in a later year – which do not fall under the agricultural exemption – could no longer be offset against the exempted gain. For this reason, the Supreme Court does not permit a valuation system under which agricultural land is valued on the basis of the WEVAB.
Farmers who wish to prevent the difference between the book value and the WEVAB of their land from ever being subject to income taxor corporation tax, must, following this ruling by the Supreme Court, find a way to actually realise this paper profit. Whether this is possible naturally depends on the specific circumstances. In any case, it generally requires the completion of (legal) formalities, which take some time. How much time these farmers are still granted depends on the political situation in The Hague.