In 2018, too, the income tax payable on income from savings and investments (Box 3) will once again be perceived by many as extremely high.
Flat rate of return
The interest rate on a standard savings account in 2018 was around 0.1% on an annualised basis. However, the Tax and Customs Administration calculates the tax on a return of between 2.02% and 5.38%. This applies insofar as your assets in box 3 exceed the tax-free allowance of €30,000 (€60,000 for tax partners).
Procedure
There is no doubt that another (test) case will be brought in 2018 regarding whether the flat-rate levy in box 3 is fair. So far, the tax court has consistently ruled in favour of the Tax and Customs Administration. The proceedings relating to 2017 have not yet been concluded, but it does not appear that the final outcome will differ from that of previous years.
The question is how long the tax court will continue to side with the government. The Coalition Agreement states that income tax on savings and investment income should be based (to a greater extent) on the actual return achieved. However, State Secretary Snel, in response to Parliamentary questions it was stated that this would not be achieved in the short term.
Make sure you lodge your objection in good time!
As he expects a large number of appeals to be lodged again in 2018, Snel has introduced a designation decision The mass objection scheme has been declared applicable. But PLEASE NOTE! This does not mean that you do not need to lodge an objection. The mass objection procedure relates solely to the (mass) processing of objections that have been lodged.
If you wish to benefit from any favourable ruling by the tax tribunal, you must lodge an objection yourself in good time against the income from savings and investments included in your final income tax assessment. ‘In good time’ means that your notice of objection must be received by the Tax and Customs Administration within 6 weeks of the date of the tax assessment.
Alternative
Is it possible to avoid the tax in Box 3 that you consider unfair? This is often possible. It is no longer possible for 2019, as we have already passed the reference date for Box 3 (1 January). However, it is possible for 2020 and subsequent years.
Please do feel free to pop in sometime our to come by and discuss the options.