The government's proposed new box 3 system needs to be scrapped, the Council of State advises. The proposal has too far-reaching consequences for citizens and the Tax Administration. It will lead to poorer service, limited opportunities for pre-consultation with a tax inspector and insufficient supervision. What is the issue?<\/p>\n
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Content and background of the bill<\/strong> Interaction of legislature, courts and implementation<\/strong> Integral view on taxing wealth lacking<\/strong>
With the Bill on actual returns in box 3, the government wants to introduce a new system within income tax for the taxation of income from savings and investments in box 3. Under the current system, tax in box 3 is levied on the basis of lump-sum returns. The Supreme Court has ruled that this flat-rate system is not in line with the European Convention on Human Rights. Therefore, the government is proposing to levy tax based on actual returns. A capital gains tax is proposed as the main rule. As an exception, a capital gains tax is proposed for real estate and shares in start-ups. In addition, a flat-rate approach, known as net property addition, is adopted for regular gains from property that is not rented out for the whole year.<\/p>\n
In its opinion, the State Council's Advisory Division discusses the interplay between legislators, courts and implementation. They have to find the right balance in mutual interaction each time. They have all fulfilled their roles, but a stalemate seems to have arisen. Against this background, the Advisory Division makes its comments.<\/p>\n
The Advisory Division notes the lack of a comprehensive view on taxing wealth. This is necessary to make a well-considered choice for a new box 3 system. It recommends paying attention to the contribution the proceeds from box 3 should make to the tax mix. It also addresses the lack of coherence between the boxes in the way in which assets are taxed.<\/p>\n