Will I get extra tax returns? The compensation for the tax on box 3 explained

At the beginning of June (2024), the high council (’Hoge Raad’) made an important decision: the tax authorities ('Belastingdienst') must compensate taxpayers who have been disadvantaged by taxation in box 3. This of course raises many questions. Who concerns this, and when should you take action? Equip has listed it for you in this blog!

Who gets money back from the Tax Authorities?

In simple language: box 3 is the category within the Dutch tax system in which assets are taxed (from a certain amount; in 2023, for example, this was from €57,000 without a tax partner or €114,000 with a tax partner). This concerns savings, investments and other assets (such as a holiday home). The tax here is based on an assumed return, or an estimated return that you would achieve on your assets.

The high council has ruled that the tax people pay on their assets must be based on the actual return, not on an estimated amount. An estimate is currently being made for all investors, regardless of their risk profile. This means that both risky investors and those who invest more cautiously, for example in government bonds, pay the same fixed percentage of tax. This can cause large differences in the actual profits achieved by different investors.

What do you have to do to get money back?

If you paid tax on an estimated return that was higher than your actual return, you are entitled to compensation. This applies to all tax assessments from 2017 that have not yet been ruled as definite. This final assessment is the final calculation of how much tax you have to pay or get back, after all data and any objections have been processed. As of 2021, the tax authorities have in principle no longer imposed final assessments for box 3, which means that many assessments are still open for correction or objection.

To determine if this applies to you, compare your tax bills and actual returns. For example, in 2022 the stock market fell sharply. If you had invested money in 2022, there is a good chance that your actual profit was lower than the assumed return on which you paid tax. So you may have to get your money back for this!

When should you take action?

Anyone who is eligible for compensation can apply for it, but it is important that you can prove that you are entitled to it. This means that you will need to keep bank statements and other relevant documents to prove that the return on your assets was lower than the estimated return on which you paid tax. The tax authorities will send a letter to taxpayers to whom the ruling applies. This may take until after 2027, so it is wise to keep a close eye on this in the coming years and to keep the documents in a handy place!

If you think this applies to you, make sure you are well prepared and have checked this all out. It is always wise to consult with a financial expert. They can help you find out whether you are entitled to compensation, and how much.

Everything clear, or not yet?

With this explanation we hope that you have a clear idea of the recent developments surrounding box 3 tax and how you can check whether you are entitled to compensation. Do you have any questions about this, or would you like to discuss your personal situation with a financial planner from Equip? Please contact us and we can help you inform your employer about our services.