October 3, 2022

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The Cabinet is considering compensating billions for savers |  the interior

The Cabinet is considering compensating billions for savers | the interior

This came in the action plan drawn up by Foreign Minister Van Rijk (Finance) in response to the Supreme Court ruling that put a hard line through the savings tax at the end of last year. That tax was calculated on bogus returns that many people didn’t get, especially on a (almost) no-interest savings account. The highest court ruled that this was a violation of the European Convention on Human Rights.

So Van Rig had a big job on his agenda: he had to decide who would receive compensation for the increased tax and how much. In addition, he had to devise a new way to recover the stalled wealth tax in the short term and determine how to do it in the long term.

two options

Van Rij now offers two compensation options. The first is mainly to recover all savers who paid taxes on that money. Their tax assessments have been recalculated for the years since 2017, based on the real savings interest: nearly 0 percent. So they pretty much get their taxes paid on that money, which requires a sum of close to 7 billion euros.

In the second variable, all returns are recalculated with the wealth tax, including those who invested their money in investments or real estate. They are evaluated annually on the basis of the average return for those different types of capital. In this form, the government lost more than 11 billion euros.

The cheapest would be to compensate the tens of thousands of people who joined the lawsuit through large objections, which would cost 2.4 billion euros. “Purely formally, we can say: She wasn’t on schedule,” van Rijg says. But it also points to the House’s express desire to accommodate all savers.

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So we can hear in The Hague that the first option is preferable, although van Rig does not comment on this: “I don’t want to expect it.” He says that the tax and customs administration systems, around which there are a lot of question marks, can handle the process: “Both variables are manageable from a technical point of view. It is a huge reform, but it is possible.”

Van Rig had already calculated that dissatisfied citizens would remain after compensation. However, it is not possible to calculate each tax return individually: “We can never calculate exactly for each taxpayer. There will always be situations where people will stand up and say, ‘My actual return was less than that.'”

Negotiations

The issue of the savings tax will be included in the negotiations on the Spring Memorandum, in which the Cabinet and the coalition have yet to decide on several billion budget problems. There is also the question of how to pay those billions.

The option ultimately chosen will also form the basis for temporary legislation by which the wealth tax can be collected in the coming years. From 2025, van Rijg wants to tax the actual return people get from their assets: “Instead of just focusing on solving a problem from the past, we also need to see how things get done from 2025.”

He will also chart this on Friday. The government is demanding a capital gains tax. In this, the tax authorities tax income from capital, such as interest, dividends and rent. An asset value development, such as an increase in stock prices in a given year, is also taxed. If the principal subsequently decreases in value, this decrease can be used as a deduction.

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Also listen to the podcast A matter of cents About the savings tax scandal: