The tax office will not have sorted out the chaos surrounding how much tax people have to pay on their assets under a system now torn up by the courts until next summer, tax minister Folkert Idsinga has said in a briefing to MPs.

Thousands of people who pay asset tax are still unclear about how much they owe because the Supreme Court said in June that investors only have to pay tax on the actual returns they have booked on their investments, rather than a fictitious percentage calculated by the tax office.

The tax covers both direct returns, such as interest, rents and dividends, and indirect returns, such as increases and decreases in the value of assets and property, even though they have not been realised.

That long-awaited ruling means that thousands of investors will pay less tax than expected over their “Box 3 investments”, costing the treasury billions of euros. The previous tax minister said he estimated the cost would be €4 billion upfront and billions more euros a year until an alternative system for taxing assets had been worked out.

The June ruling was based on five cases in which people had challenged the revised system drawn up by the government, in the wake of a 2021 Supreme Court ruling which said the fictitious tax on assets was in contravention of European law.

Government officials then worked out a temporary, lower tax rate to be used while a new system was being developed. But the Supreme Court said in June that the temporary system is also in conflict with the law on ownership and discriminates between successful and less successful investors.  

The tax office is continuing to base its tax demands on an assumed profit and taxpayers who think they should pay less have to challenge this, based on the arguments in Supreme Court’s June ruling.

The tax office is now working on developing a standard way for people to challenge the tax office calculations, but that will not be ready until June 2025, Idsinga said.

The new government has also pledged to revise the asset tax system and is thought to be considering introducing a capital gains tax.