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Caretaker cabinet unveils new plan for asset savings tax

The caretaker Cabinet released a proposal on Friday for a new method to tax savings from capital assets. State Secretary Marnix van Rij’s (Finance) new plan is to tax the wealth in “Box 3” on a mixture of capital growth and capital gains. However, he pointed out that the decision lies with the new Cabinet formed after the election. The new plan was previously reported by de Telegraaf on Thursday.

The proposal that the government publicly presents for consultation online is not a “fully-fledged legislative proposal” but rather a “tool for a new government,” Van Rij said. There are also various options from which the future Cabinet can choose. It can also decide to reject this proposal entirely, the minister added.

Van Rij had to develop a successor for the Box 3 tax because the Supreme Court scrapped it at the end of 2021. For years, wealthy people had to pay taxes on a fixed and assumed rate of return. That was unfair, according to the Supreme Court, because savers had to pay taxes on 4 percent interest, for example, while they hardly earned on their savings due to low-interest rates.

To create a fairer system, the Cabinet now seeks to do it differently. Wealthy individuals will not only pay taxes on income and returns from assets but also on their appreciation in value, such as shares in the stock market that gain value.

The gains tax will apply to other categories like real estate and investments in unlisted companies like startups and family businesses. Then, the owner will only pay tax when they profit from these investments, for example, when selling their shares or property.

Another new provision in the new savings tax is that savers and investors can offset their capital losses.

In recent years, much effort has been devoted to shaping the proposal for a capital yield tax. The current plan is a compromise between the coalition parties. While only the new government can undertake the reform of the savings tax, the current caretaker government wanted to initiate the consultation process. “Postponing the online consultation would make it almost impossible to implement a new system by January 1, 2027”, said Van Rij.

Relevant parties, including tax consultants, will have the opportunity to comment on the proposal in the coming weeks.

https://nltimes.nl/2023/09/08/caretaker-cabinet-unveils-new-plan-asset-savings-tax Caretaker cabinet unveils new plan for asset savings tax

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