The Boxing 3 epic continues

In our news on the Nalog.nl website, we carefully monitored all the ups and downs with the payment of compensation to taxpayers who were incorrectly charged tax on Box 3 for 2017-2020. Like us wrote, So far, only those who filed objections have been able to receive a refund. At the same time, a large number of those who did not object were “left overboard”. Now the government is ready to initiate the "writing of a new chapter" in this endless epic: those who do not object can demand a new decision from the Supreme Court (Hoge Raad - HR).

Previous "chapters" of the epic

We remind you that Box 3 is a component income tax. If you want to know more about him, see webinars from Nalog.nl. Unfortunately, the current tax legislation for Box 3 cannot be called perfect. In August 2021, massive objections were received from taxpayers to the tax service in connection with the incorrect calculation of tax for Box 3 for 2017-2020. The Supreme Court considered these objections valid, and the government agreed to pay compensation, but only to those 60.000 people who filed formal objections.

If you are interested in this story in all its details, read our articles in chronological order:

Extension

On May 20, 2022, the Supreme Court of the Netherlands ruled that there is no legal basis for compensating taxpayers who did not object to the unfair assessment of Box 3 taxes. The Government investigated whether, in principle, compensation could be paid to those who did not object, and if so, how. In the end, the decision was made not to offer compensation to those who did not object.

4,1 billion euros were allocated to pay compensation to objectors. More than half of these funds will eventually go to taxpayers with more than €3 in assets in Box 200.000. And for the government, the priority was to support low-income people who are struggling to pay utility bills. Therefore, it was decided to direct the funds to restoration of purchasing power. This caused a strong backlash from those who did not object, as they considered the government's decision unfair.

Mass objection plus procedure - massaal bezwaar plus

Filing and processing requests from taxpayers requires a lot of work both from themselves and tax consultants, as well as from the tax authorities, since each request must be processed individually.

Therefore, the “mass objection plus” procedure will be applied. It will be possible to make one decision on a large number of requests. For those who did not previously object to the tax on Box 3, no action is required now. Requests already submitted will be kept separate until a decision is made by the Supreme Court. As a result, not all requests will be processed individually, which will prevent the tax office from being overwhelmed.

The Supreme Court will make a decision, and all i will be finally dotted. At the same time, the government emphasizes that in its decision of May 20, the Supreme Court clearly stated that those who did not file an objection were not entitled to compensation. Therefore, the government does not expect that the new decision will give a great chance of restoring the rights for those who do not object.

Justifications by the government for its position

In recent years, the government has consulted with the Taxpayers' Association, tax consultant organizations and the Consumers' Association. In the course of this dialogue, it became clear that all these organizations want to put the question before the court: should not all the affected taxpayers be compensated after all?

Together with these groups of experts, the IRS will select cases to take to court, and the court will be able to give structured answers to questions that still remain with those who do not object. In early 2023, recommendations will be issued for the application of the “mass objection plus” procedure.

Publication Date: 21.11.2022