Consequences of the savings tax ruling ‘difficult puzzle to be solved quickly’

“A midships missile attack on the economy of the coalition agreement”, calls one of the problems involved with the so-called savings tax. “It’s an extremely difficult puzzle,” Finance Minister Marnix van Rij wrote to the House of Representatives.

In December, the Supreme Court ruled that the current system of taxation of savings and investments is in violation of the law. That lawsuit was filed by 60,000 savers who thought it was unfair that they largely did not get interest on their savings, but had to pay capital gains tax. The Supreme Court also ruled that they should have compensation.

That compensation is therefore for people with wealth. The discussion thus also touches on the worldview of the various political parties and what they consider fair taxes. Depending on the political choices that will be made in the near future, it will be billions to many billions of euros. Wednesday will be the first push for this in a debate in the House of Representatives.

Van Rij’s puzzle consists of a series of smaller puzzles.

Who is compensated?

The Supreme Court ruling concerns tens of thousands of people who objected in 2017 and 2018. The Secretary of State assumes that people who objected in 2019 and 2020 are also entitled to compensation because the system at the time still worked the same way.

In addition, they are not the only ones who have paid too much tax. According to Bond voor Belastingbeers, there are more than a million people a year.

Van Rij looks at what the verdict means to them and also wants to find out which of these people have really paid too much. For example, it may be that someone did not immediately get money from investments, but that they have become worth more. The question is how it can be counted.

There is also the question of whether Tax can even find out who has paid too much tax. In total, about 3 million people pay tax in Box 3. Most actually earn more on their fortune than the IRS calculates.

What happens to the years from 2021?

Now that the ruling has fallen, Tax can no longer impose assessments on the basis of a law that is incorrect. “The judgment therefore also applies to all taxpayers with income from box 3 in the tax year 2021 and beyond,” Van Rij wrote to the House.

The gap in the budget may therefore become even larger if a solution is not found quickly for the current tax year and the coming years. That’s easily around 4.5 billion euros a year.

It was already agreed in the coalition agreement to change the system from 2025 and start counting on a real return. Mr Van Rij writes to Parliament that this cannot be introduced sooner. To prevent the Treasury from missing out until then, a temporary solution must be found. An emergency law is therefore needed, says the Secretary of State.

Who will pay for it?

In total, the bill for compensation can therefore amount to tens of thousands of billions of euros depending on the solution chosen. VVD does not want to anticipate the debate yet. The other coalition parties do, and they are clear: that money must be found in a different way than the wealthy, especially when it comes to the coming years.

That is a sensitive point. In the debate on the new government plans, one of the major criticisms of the opposition was that this coalition is doing too little to combat inequality in wealth. It is a topic that is certainly sensitive among the supporters of VVD.

“The most important thing is that the workers do not pay the bill for this, that people who have a good fortune continue to contribute well to the tax in the future,” says Pieter Grinwis from ChristenUnie.

Romke de Jong from D66: “What is important for D66 is that we do not take it from the workers or from the plans for education, housing or climate.” Inge van Dijk from CDA: “I think it’s too easy to get rid of government debt. I think the biggest shoulders should carry the heaviest burdens.”

And in the search, what is technically possible at Skat must also be taken into account. The final solution will take months, the Secretary of State said in the House tonight.

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