The Dutch Council of State has advised the government to discard a new proposal for taxing savings and investments, stating that it is too complex for both citizens and the Tax Authorities. The proposal aims to tax savings and investments based on actual returns rather than a fixed rate, following a Supreme Court ruling that the previous method violated the European Convention on Human Rights.
According to the Council, the new system would increase complexity, place a significant administrative burden on about 1.6 million taxpayers, and could lead to reduced service and insufficient oversight by the Tax Authorities. Additionally, the assumption that the new system would generate the same tax revenue as before may result in further disputes between citizens and the government.
The Ministry of Finance responded by acknowledging that "the ideal system does not exist" and noted that while a system based on actual returns is fairer, it demands more from taxpayers. The Ministry stated it would carefully study the Council's advice and provide a detailed response later.