Everyone hates paying taxes. That is why saving on tax is high on everyone’s to-do list. But putting cost and effort in a no-win situation is no fun either.
The reference date of 1 January 2023 for the determination of wealth in Box 3 (savings and investments) of the Dutch tax system is coming up. We now know that the possession in the savings account will hardly lead to taxation. For many households a blessing after all those years that savings yielded nothing and you still had to pay a hefty tax on it.
The investors among us (shares, bonds, homes, etc.) know that the tax on that capital will be more substantial. Some consider converting the investments into savings before 1 January 2023 and then turning the savings back into investments after 1 January 2023. Please note the sale and purchase of investments can prove costly, reducing the benefit.
The Dutch Tax and Customs Administration has foreseen this possible behavior. Legislation is imminent to prevent it (Bridging Act Box 3). This temporary shifting of asset classes within Box 3 is indicated by “reference date arbitration”. The effect of this act can already take effect retroactively as of 1 October 2022. It means that sales of other assets for conversion into cash in either the last quarter or the first quarter of a year are ignored.
If the Senate approves the Box 3 Bridging Act, just like the House of Representatives did, you should think again.