Taxpayers who did not protest about the amount of asset tax they had to pay over their savings do not need to be compensated by the government, the Supreme Court said on Friday.

The court said in its long-awaited ruling that judges cannot force the tax office to cut the asset tax paid by savers who did not make a formal protest within the required period. The ruling could affect hundreds of thousands of people.

At the end of last year, the Supreme Court said the Dutch tax office was wrong to use a fictitious amount when calculating how much tax a couple had to pay on their savings, because it contravened the right to ownership and European human rights laws.

That case dates back to 2017 and concerns a taxpayer with €1m in assets, of which 80% were held in a savings account, generating a low return. He was taxed, not according to the actual return the savings generated, but according to a fictional mix, including just 21% in savings.

This meant his tax bill was far higher than it should have been. The tax on savings in 2017 was 1.63%, on assets 5.39%.

Challenged

At the time, tax minister Marnix van Rij said it was not clear if the tax office would reassess the demands of everyone who paid asset tax, or just the estimated 60,000 people who have challenged the amount they were ordered to pay.

Friday’s ruling means that the government is not under any obligation to compensate everyone who paid asset tax on their savings, removing one financial headache that ministers had been facing.

The cabinet had already said it needed to set aside €2.8 billion to compensate savers who did complain but that if everyone needed a refund, the bill would be far higher – as much as €11.7 billion according to some estimates.