Insiders confirm that following reports from RTL Nieuws. Compensation would cost billions of euros and the priorities now are to repair purchasing power for the lower incomes. This will not cause the cabinet any legal problems, because earlier this year the Supreme Court already ruled that non-objectioners are not entitled to compensation. Nevertheless, a large part of the House of Representatives wished to do something at least for the ‘small savers’.
The coalition has now made a different decision: only savers who did object can count on compensation. Responsible State Secretary Van Rij will inform the House of Representatives on Budget Day.
The debate about the savings tax stems from a judgment of the Supreme Court of 24 December 2021. The highest Dutch court then ruled that the Box 3 tax, also known as the savings tax, is contrary to European law. The Dutch tax rate is on average much higher than the return that the taxpayer can achieve on his capital. As a result, millions of savers paid too much tax in the 2017-2020 period.
Large group of taxpayers do not invest
About 40 percent of all Box 3 taxpayers only have savings, while the tax authorities have assumed since 2017 that every Dutch person with more than 30,000 euros in assets holds at least one third of the taxable amount in shares or other investments, on which the return is higher. The fixed tax rate in Box 3 was therefore between 1.9 and 5.7 percent in 2021, while savers made 0 percent return.
The judgment obliges the government to compensate the victims, but in a second judgment in May this year, the Supreme Court limited the groups for which the compensation must be paid to two: the people who had already objected to their attack (about 60 thousand ) or people whose attack has not yet been determined (560 thousand). The Tax and Customs Administration must repay these two groups this year the excess tax paid for the years 2017 to 2020.
The question that still hung above the market was what to do with the 2.8 million Dutch people who had not objected to their attacks for 2017-2020 and whose attacks had already been definitively determined before the Christmas arrest. The House of Representatives and the cabinet had to consider this. State Secretary Marnix van Rij (Fiscal Affairs) could brush his hand over the heart and still arrange the compensation through a specific exception law.
Compensation would cost 7 billion
During the negotiations on the budget for 2023, the government parties decided otherwise. Compensating all savers would cost the treasury 7 billion euros. The parties prefer to spend that money on people who get into trouble because of high inflation. The government is allocating 15 billion euros for this.
Partial compensation for a limited group of ‘small savers’ is politically and legally complicated: if the House and Cabinet agree on the group that is entitled to it, others are expected to object to it legally. That is why the government does not start.
The decision concerns savers who have been duped over the period 2017-2020. Earlier this year, the cabinet decided to revise the tax assessment of 1.9 million savers for the year 2021, because they also paid too much tax. Most can count on a substantial tax discount in Box 3. All taxpayers who held more than 50 thousand euros in savings and/or (real estate) investments on 1 January 2021 will benefit from the correction. This repair operation will cost the treasury a one-off 3.8 billion euros.
Meanwhile, Van Rij is working on the design of a new capital gains tax that taxes the actual return. It should come into effect by 2025.