Restructuring box 3 assets before October 1st (valuation date arbitration)

The tax authorities have indicated that the received objections with a box 3 element for the years 2017-2022 and the issuing of definitive assessments for the tax years 2021 and 2022 with a box 3 element will be temporarily suspended until the Supreme Court provides clarity on whether the offered legal rehabilitation is in accordance to the Christmas court verdict. However, the tax authorities will issue provisional assessments for 2021 and 2022.​

This method of (temporary) restructuring of assets around the January 1st valuation date, with the aim of reducing your tax liabilities, is referred to as valuation date arbitration and is considered undesirable by the government. To prevent these types of temporary arrangements, it has been determined that conversions of assets within a 3-month period between October 1st and March 31st will be disregarded, and the tax authorities will consider the composition of the assets before the conversions, unless the taxpayer makes it plausible that there were legitimate reasons. In that case, the actual composition of the assets on January 1st will be used for the calculation of your tax liabilities.

If you are considering temporarily converting highly taxed assets into low-taxed assets from a tax perspective, it is important to take into account the period from October 1st 2023, to March 1st 2024. Transactions outside this period will not be considered as a wrongful action. For transactions within this time frame, the taxpayer must provide evidence of legitimate reasons. We advise you to keep documentation related to this in your records.

More from the HBK Update June 2023

• New (temporary) legislation regarding box 3
• Holding on to definitive assessments and objections with income in box 3
• Restructuring box 3 assets before October 1st (valuation date arbitrage)
• Excessively lending act
• Limitations/Abolition of Business Succession Facilities
• Tax authorities will start checking for pseudo self-employment from 2025
• Convert loss from substantial interest into tax credit
• No tax-free allowance for each day working from home
• Repaying Deferred Tax Payments
• MIA and Vamil
• Reimbursement of costs for assistance with filing income tax return for foreign employees
• Co-operating spouses: Co-operating remuneration or co-operating tax deduction?