The House of Representatives will soon debate the new rules for box 3, the tax box for assets. Criticism is being voiced from left to right and holders of Bitcoin (BTC) and other crypto coins are eagerly hoping that a bold line will be passed. Still, the proposal seems to have a majority.
Box 3 has been on the drawing board for years
The Hague has been planning for years to reform box 3 and impose taxes on the actual return. On Monday, the House of Representatives will seriously discuss the new rules for the first time.
Box 3 is the tax on capital, such as savings, investments and crypto. Since 2001, the Tax Authorities have been calculating with a fictitious return: an assumed return, regardless of what someone really earns. Until 2016, this was one fixed percentage of 4 percent.
From 2017 onwards, a distinction was made between savings and investments, but still based on averages. As a result, savers in particular paid too much.
In 2021, the Supreme Court put an end to this. In the Christmas judgment, the judge ruled that taxing fabricated returns is not fair.
Since then, The Hague has been working with temporary emergency solutions, such as the Bridging Act of 2023. Savings, investments and other assets (such as shares and crypto) are now taxed separately.
The proposed law should put an end to this from 2028 by levying taxes on what people really earn in interest, dividends and price gains.
Suppose you have one Bitcoin worth 100,000 euros and the Bitcoin price rises by 30 percent in a calendar year. Then you will have to pay tax on an amount of 30,000 euros.
Support out of necessity
The pressure on the House is great. The law must be adopted by mid-March at the latest in order to achieve the planned introduction on January 1, 2028. If that does not work, there is a risk of another postponement and a major setback for the state treasury. This is now estimated at 2.4 billion euros per year
Almost no one wants that scenario. Postponement means that the Tax Authorities and taxpayers will be stuck with the current counter-evidence scheme for even longer. If your actual return is lower than what the tax authorities assume, you can get money back. This arrangement is labor intensive and leads to many objection procedures.
Lots of criticism, little enthusiasm
Yet there is criticism of the new system on all sides.
Right-wing parties have difficulty with the compromise that has been chosen. Most investors will pay taxes on profits that only exist on paper (which can force people to dump some of their investments), while real estate and start-ups are only charged at the time of sale.
Left-wing parties consider the proposal too cautious. They point out that working people face high rates, while large assets in box 3 are taxed relatively mildly. There is also concern that the new system will become complicated again and remain difficult to implement.
Even State Secretary Eugène Heijnen has already hinted that this law is not an end point. The new box 3 system should above all bring peace after years of legal chaos.
Monday’s debate is therefore not only about this law, but also about what comes next. Several parties see the proposal as an intermediate step towards a complete system of capital gains tax, in which tax is only levied upon sale.
That idea sounds simpler and fairer, but it comes at a price. In the first years it would cost the treasury billions, because investors can postpone profit taking. Economists also warn that such a system can inhibit sales behavior.
Source: https://newsbit.nl/tweede-kamer-stemt-over-nieuwe-box-3-regels-met-grote-gevolgen-voor-crypto/
