On 14 March 2025, the bill on the Box 3 Rebuttal Scheme was introduced in the House of Representatives in response to the Supreme Court’s ruling that the Box 3 Legal Redress Act and the Box 3 Bridging Act also violate the prohibition of discrimination.
Box 3 levy still discriminatory
On 24 December 2021, the Supreme Court ruled that the way in which the box 3 levy has been designed since the year 2017 violates both the prohibition of discrimination (art. 14 ECHR) and the right to peaceful enjoyment of possessions (art. 1 FP ECHR). Legal redress was provided through an alternative return calculation based on the so-called fixed-rate savings option.
However, on 6 June 2024, the Supreme Court ruled that this legal redress also fails the test. In particular, the return calculation on possessions other than savings is still discriminatory. The difference in tax treatment between successful and less successful investors is still significant, without this being sufficiently justified.
The Supreme Court even took this one step further and ruled that the above likewise applies to the Box 3 Bridging Act, as the latter is based on virtually the same principles. In this respect it does not matter how big the difference between the fixed-rate and the actual return is.
On 20 December 2024, a number of other judgments addressing the box 3 legal redress was pronounced. The Supreme Court took this opportunity to clarify the return calculation on dwellings in box 3.
Box 3 Rebuttal Scheme Act
Following these judgments, the government decided to introduce a rebuttal scheme in box 3. To this end, a bill was introduced in the House of Representatives on 14 March 2025, based on the principle that the return calculation takes place in accordance with the statutory regulations in force in the relevant tax year. These are the Income Tax Act 2001 or the Box 3 Legal Redress Act for the years 2017 through 2022, and the Box 3 Bridging Act for the years 2023 through 2027.
If the taxpayer takes the position that the actual return in any year is lower, this must be demonstrated plausibly by using a form provided by the Tax Administration, called the Statement of Actual Return (Opgaaf Werkelijk Rendement, or ‘OWR’). This form is expected to be available from July 2025. Providing rebuttal evidence is open to all taxpayers who were eligible for legal redress under the judgment of 24 December 2021, provided they now file objections or request ex officio reductions on time. Hence, legal redress does not cover income tax assessments that were already irrevocably determined on 24 December 2021.
Legal redress based on actual return
Substantively, the legislator is looking to closely align with the legal rules formulated by the Supreme Court in 2024, regarding the legal redress to be granted:
As far as the Box 3 Legal Redress Act is concerned, the rebuttal scheme in Box 3 will be retroactive to 1 January 2017. For the Box 3 Bridging Act, this will be 1 January 2023. The State Secretary for Finance is pushing the House of Representatives to urgently discuss the bill so as to eliminate the shortcomings in Box 3 as identified by the Supreme Court.
Source: Parliamentary Papers II 2024/2025, 36 706, no. 2 (bill) and no. 3 (Explanatory Memorandum)