Aart Gerritsen, Associate Professor at Erasmus School of Economics, argues that the Netherlands should stick to an accrual-based capital gains tax as the core of the new Box 3 regime.
In an opinion piece for the Dutch financial newspaper Het Financieele Dagblad, Gerritsen argues, together with Ruud van den Dool (Professor of Fiscal Economics & Tax Accounting, Nyenrode Business University) and Bas Jacobs (Professor of Public Economics, VU Amsterdam), that this form of taxation is economically superior to a realisation-based capital gains tax, despite the fierce criticism of the current legislative proposal.
The plea by Gerritsen and coauthors follows the decision by Minister of Finance Eelco Heinen to revise the law on taxation of actual returns in Box 3 after objections were raised, particularly in the Senate. Critics want the law to only tax capital gains when assets are sold, but according to the authors this would encourage tax deferral, reduce government revenues and distort investment choices.
An accrual-based capital gains tax avoids economic distortions and treats savers and investors equally, they argue. The authors do acknowledge that exemptions are needed for assets that are difficult to value or illiquid, such as real estate and start-ups, and that the law should offer more generous possibilities for loss offset. In their view, the cabinet would be wise to continue on its current course and improve the bill in targeted ways.
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You can download the opinion piece above (in Dutch). For more information, please contact Ronald de Groot, Media & Public Relations Officer at Erasmus School of Economics: rdegroot@ese.eur.nl, +31 653 641 846.
