Van Rij draws up ‘plan B’ on asset taxes amid concern system is too complex


Plans to reform asset taxes after the Supreme Court threw out the previous system may need to be reviewed again because they risk being too complex, junior finance minister Marnix van Rij has said.

The ruling in December 2021 said the government was wrong to impose a notional ‘flat rate’ savings and assets based on the assumption that savers would earn 4% on their investments.

The cabinet is due to introduce a new tax system based on actual earnings from 2026. In the meantime a transitional system has been brought in that still uses notional rates but distinguishes between savings, which are currently taxed at 0.01%, investments, which are subject to a variable rate of around 6%, and debts, where the rate is around 2.5%.

Van Rij is concerned that requiring people to submit a full breakdown of their savings and assets would make tax returns more complicated, which increases the risk that they will end up being charged too much or too little. That could lead to corrections in later years that cause financial difficulties.

He has proposed a Plan B, which is a more detailed version of the interim rules, using a wider range of notional tax rates so that the basis of people’s tax bills is more in line with what they earn.

Property assets would be divided into residential and non-residential, with a separate category for homes that are rented out, while bonds and shares will also have separate tax rates.

Opposition parties are concerned that the government could face more legal challenges from savers if they continue to rely too much on notional tax rates, which the Supreme Court said contravened people’s right to property and European human rights laws.

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