Tax partners can still change their mutual distribution of box 3 after a collective ruling in mass objection proceedings. The Supreme Court ruled that they have six weeks from the reduction decision to do so.
Box 3 and mass objection
A man objects to his 2017 income tax assessment. His objection is classified as a mass objection on the box 3 levy. In February 2022, the collective decision follows: the objection is well-founded. In July 2022, the man receives a reduction decision. A day later, he and his wife inform the inspector that they want to change the distribution of their box 3 assets. They want to allocate everything to the wife.
Inspector refuses
The inspector refuses to cooperate. According to him, the assessment has become irrevocable by the collective judgment. After that, the distribution cannot be changed. The court refers the matter to the Supreme Court.
When may the distribution still be adjusted?
Tax partners may change their mutual distribution of certain income components as long as the assessments of both are not yet irrevocable. If an assessment becomes irrevocable by a Supreme Court ruling, partners still have six weeks to adjust the distribution. But does the same apply in mass objection proceedings? In that, the assessment becomes irrevocable by a collective ruling, without the taxpayer being able to do anything about it.
Lawmakers overlooked this
The Supreme Court notes that the legislator, when introducing the mass objection procedure, did not take into account the consequences for the partner distribution. A literal interpretation of the law would mean that after a collective ruling, partners would no longer have the possibility to change their division. The Supreme Court considers that unreasonable.
Only after reduction is there clarity
The Supreme Court points out that partners cannot make an informed choice until they know the numerical consequences. In mass objection proceedings, this often becomes clear only after the reduction decision, not already after the collective ruling. It would be illogical to give partners covered by the mass objection less opportunity than partners who have conducted individual proceedings.
Six weeks
The Supreme Court ruled that partners may change their distribution until six weeks after the reduction order issued by the inspector to elaborate on the collective ruling. This applies if the inspector is wholly or partially ruled against in the mass objection procedure. A request for ex officio reduction does not offer any additional possibility to still change the distribution.