Tax office tells 2.6 million their asset tax may be too high

The tax office will on Tuesday begin alerting 2.6 million taxpayers to the possibility they have paid too much asset tax from 2017 onwards.

The warning follows two Supreme Court rulings on the way the tax office calculated the tax payable on assets such as property, savings and shares, which was based on fictitious returns.

The letter does not call on the recipients to take action, merely affirms their status. It will not be until next summer at the earliest that they may be asked to fill in a form.

Since the introduction of the asset tax in 2001, people with property or considerable savings have paid tax based on an assumed profit and an assumed portfolio mix But this fictitious mix often produced a return that was far higher than the actual earnings.

The Supreme Court ruled in 2021 that the system contravened EU legislation and ordered the government to rethink. A revised system was also thrown out by the courts in June.

The government is now working on a new system, but last month the Financieele Dagblad reported that the tax office will probably not meet the 2027 deadline to introduce a new asset tax based on actual income.

The draft legislation is currently being assessed by the Council of State but its introduction is likely to be delayed because of a shortage of IT capacity at the tax office, the paper said. Every year of delay is costing the treasury €2 billion.

One group of people whose 2019 tax return has not yet been finalised should act now, but will be warned to do so in the letter.