07/June/2024

Important rulings by the Supreme Court on Box 3

Here are the four main conclusions:

Box 3 in violation of European law: The Supreme Court has ruled that Box 3 under the Recovery Act is still in violation of the European Convention on Human Rights (ECHR). Legal redress must be provided.
Share in homeowners’ association reserve fund not a bank deposit: The share in the reserve fund of a Homeowners’ Association (VVE) is not considered a bank deposit under the legal regulation from 2018 to 2024.
Right to interest compensation on refund: Taxpayers generally cannot claim interest compensation on refunds of Box 3 levies due to violations of the ECHR.
Unrealized capital losses to be included: Unrealized capital losses on investments must be included in the calculation of the actual return for Box 3.

Consequences for Individuals

For individuals, this means that they may be eligible for compensation if their actual return is lower than the deemed return used by the tax authorities. This could lead to significant tax refunds and compensations, especially for those who have made risky investments or hold a share in a VVE reserve fund.