Important update on Box 3 Tax Ruling

Broadstreet - News - - Important update on Box 3 Tax Ruling

June 28th, 2024

We want to inform you about the recent development concerning the Dutch Box 3 tax system. On June 6, 2024, the Supreme Court of the Netherlands ruled that the current system, even under the Recovery Act, violates the European Convention on Human Rights (ECHR). This decision impacts the way taxable income from savings and investments (Box 3) is calculated.

Summary of the Supreme Court Ruling

The ruling states that the current method of calculating the taxable income from savings and investments, which uses a fixed percentage, does not accurately reflect the actual returns. This approach was found to disproportionately burden taxpayers whose actual returns are lower than the fixed rate, this is in violation with European law.

Government actions

The Ministry of Finance is currently studying the Supreme Court’s ruling. After a political decision, we will be informed about the correct way to calculate Box 3 income. This process may take some time, and we ask for your patience.

What this means for you

You do not need to take any (immediate) action at this time. If the new calculation method for Box 3 income affects your income for 2023 or previous years, you will receive a letter from the Dutch tax authorities later this year.

We understand that this ruling may raise questions and concerns. Please do not hesitate to contact us if you need any clarification or if you would like to discuss how this ruling specifically affects your tax situation. Also please keep us informed upon receipt of any letters from the Dutch tax authorities in this respect.