Cabinet set to postpone asset tax reform again to 2029

The Dutch cabinet has decided to postpone the implementation of asset tax reform until 2029, following a draft budget agreement reached over the weekend. The original plan was to introduce a new mechanism for taxing assets, savings, and investments by the end of 2028. However, junior finance minister Eelco Eerenberg appears set to withdraw the bill from the Senate due to opposition parties' criticism of the replacement system.

The previous system, which taxed unrealized assets on a flat rate, was deemed unconstitutional by the Supreme Court in 2021 as it violated the European Convention on Human Rights. The new system aims to tax actual returns by requiring taxpayers to submit details of their savings and investments with their annual income tax return.

However, right-wing opposition parties are pushing for the government to introduce a capital gains tax instead. The interim box 3 system, which features different fictional rates for deposit savings, investments, and debts, is in place until the reform is implemented. It is estimated that the switch to the new system will cost the Dutch treasury around €2 billion annually.