On June 6, 2024, the Supreme Court ruled that the levy system of box 3 violates the European Convention on Human Rights if your actual return is lower than the fixed return. You can find more information about this ruling here. In a room letter dated September 17, 2024, the State Secretary of Finance indicated which taxpayers can invoke this ruling. For these taxpayers, the actual return will be taxed if they can make it plausible that their actual return in a tax year was lower than the fixed return (the rebuttal rule). Eligibility may require action before Jan. 1, 2025. In this article, we explain when this is the case.
Deadline to file request for ex officio reduction final 2019 income tax assessment is Jan. 1, 2025
In the room letter of September 17, 2024, the State Secretary of Finance defined the target group for the rebuttal scheme. A broad approach applies. Even if you have not filed an objection against an imposed final income tax assessment, you can qualify for the rebuttal scheme. In that case, you must file a request for ex officio reduction within five years.
You can invoke the 2019 rebuttal scheme if:
- You received your final 2019 income tax assessment after December 24, 2021, or the final 2019 income tax assessment was not yet irrevocably fixed on December 24, 2021 (in principle, this is the case if the six-week objection period has not yet expired, i.e., if the date of the final 2019 income tax assessment is November 12, 2021, or later), and;
- You applied for an ex officio reduction before Jan. 1, 2025.
Starting Tuesday, October 15, 2024, the Tax Office will send out information letters about additional box 3 legal recovery. In most cases, no action is required as a result of this letter. If your 2019 income tax assessment was not yet irrevocably fixed on December 24, 2021 (i.e., you meet the above conditions), the letter will state that you must file a request for ex officio reduction before the year end in order to make use of the rebuttal scheme. In addition, a standard petition will be sent as an attachment with the letter. In this case, we would be happy to receive a copy of the letter and assist you in filing an ex officio reduction request. If you have not received a letter, but you expect to meet the above conditions, and your actual return is expected to be lower than the standard return, please contact us. We will then prepare a request for ex officio reduction.
Starting in the summer of 2025, the Internal Revenue Service will make available a "statement of actual return" form. With this form we can then report your actual return. We recommend that you already collect data with which we can determine the actual return. Think of quarterly statements of investment portfolios, annual statements of bank accounts, property values and interest received/paid on receivables and debts in box 3. Experience shows that collecting this data becomes more difficult as time passes.
If you have received a final 2019 income tax assessment that was already irrevocably determined on December 24, 2021 (date of the final 2019 income tax assessment dated before November 12, 2021), you do not have to do anything at this time. You will then automatically run in the ongoing mass objection plus proceedings. In these proceedings, the Supreme Court will rule whether that all taxpayers may use the rebuttal scheme, even if no objection has been filed, or if no request for ex officio reduction has been submitted.
Required actions IB 2020 and beyond
If you want to use the rebuttal scheme for 2020, almost the same conditions apply as for 2019:
- You received your final income tax assessment 2020 after December 24, 2021, or the final income tax assessment 2020 was not yet irrevocably fixed on December 24, 2021 (in principle, this is the case if the date of the final income tax assessment 2020 is November 12, 2021 or later), and;
- You applied for an ex officio reduction before Jan. 1, 2026.
Completing the 'statement of actual return' form in the summer of 2025 qualifies as a request for ex officio reduction. Therefore, if you complete this form for the 2020 tax year, before January 1, 2026, an additional request for ex officio reduction is not required.
In conclusion
Do you meet the conditions and wish to submit a request for ex officio reduction, or do you have questions about your situation? Please contact us via your relationship manager, by phone at 040 - 2 504 504 or via the contact form below.