House of Representatives talks about expensive compensation for ‘savings tax’

The House of Representatives is debating with State Secretary Marnix van Rij (Fiscality) about compensation of savers for the illegally declared capital yield tax, also known as a savings tax. In any case, the scenarios on the table cost billions and will put a heavy burden on the already troubled tax authorities.

At the end of last year, the highest court canceled the way in which the Netherlands levies tax on assets above 50,000 euros. In recent years, the levy on a fixed, invented return has been unreasonably disadvantageous for people who only had savings. In practice, they often paid more tax than they actually received in interest.

The judge ruled that the capital gains tax should be overhauled, but also that people who have wrongly paid this tax in recent years should be compensated for it. The question that still remains is which groups should be compensated exactly, savers only or also people who had their assets (partly) in shares or real estate.

In the ‘cheapest’ scenario, the compensation scheme will cost 2.4 billion euros. Only savers who have objected to the levy will then receive a refund. But if it is decided to compensate a larger group, and also involve investors who have had a lesser year, the bill could rise to 11.7 billion euros.