Tax Authority starts refund process for too high asset taxes; Expected to cost €6.4 bil.

Today marks the start of the major recovery operation for the Box 3 tax. The Tax Authority will start the process of refunding the hundreds of thousands of people who paid too high asset taxes for years. The government expects the recovery operation to cost 6.4 billion euros.

The Tax Authority is putting a form online today that people can use to request a refund, NOS reported. This follows a ruling by the Supreme Court that the Box 3 tax on returns generated by assets like savings, stocks, and property was calculated unfairly.

Between 2017 and now, the Tax Authority taxed assets in Box 3 on an estimated return instead of checking how much money each citizen’s assets actually yielded. But because interest rates were historically low a few years ago, many people got much less on their savings, etc., than the Tax Authority assumed, so they paid more tax than they had to.

From today, people who believe they paid too high taxes can fill out the Tax Authority’s form for a refund. The government expects the recovery operation to result in a loss of 6.4 billion euros in tax revenue over the years 2017 through 2024.

According to NOS, tax experts expect the amount to turn out lower. In practice, they expect that people will be able to claim less money and that not everyone will go through the effort to apply for a refund.

The plan is to implement a new system in 2028 in which the Tax Authority will immediately calculate someone’s actual return. Until then, the Tax Authority will still calculate Box 3 tax based on an estimated return, and people will then have to provide documents to prove that their actual return was lower.