Be prepared for the Box 3 adjustment and choose the best real estate administration and management software from emlinked now.
On September 8, 2023, the internet consultation for the new Box 3 regime effective January 1, 2027, was launched. It is striking that under the AWR section, it only states “PM introduction of administration obligation for Box 3 taxpayers.” It is therefore still unknown how this should be implemented in substance.
A possibility for delegation is mentioned in the draft explanatory memorandum, but this cannot be found in the draft bill. Where it concerns a tax based on “the amount of the combined benefits that are realized, under whatever name and in whatever form,” comparable to the profit sphere, that administration obligation will in any case go quite far. But even then, the question remains whether, for example, information that may be relevant for the valuation of assets and liabilities must be administered and retained.
For smaller estates, determining the result in accordance with the profit sphere seems to me to be administratively too far-reaching. I fear that the administrative requirements will lead to major problems regarding investments made through foreign institutions and investments outside of financial institutions.
For larger assets, the administrative obligation does not seem to me to be the problem so much as the valuation of the assets. Moreover, in a capital gains tax, the valuation in one year always has direct consequences for the valuation in the following year as well. Incidentally, this also means that reassessment for this type of asset becomes a minefield for the tax inspector. After all, he will have to determine the capital gain on an annual basis. When I see how much effort a one-off valuation for emigration or the application of the Business Succession Relief already entails, my conclusion is that a capital gains tax is unworkable, at least for non-listed shares. Due to a lack of information and control capacity, this leads to a de facto arbitrary levy, which is contrary to the principle of legal certainty. Administratively, a capital gains tax seems to me only feasible for listed securities, liquid assets in foreign currency, and derivative instruments; in short, assets for which an objective, independent valuation is continuously and immediately available. As far as I am concerned, there should first of all be a separate efficiency exemption for capital gains, if desired in the form of a threshold exemption and with the exception of capital gains on listed securities, the administration of which can de facto be outsourced to financial institutions. If a capital gains tax is chosen instead of a capital appreciation tax, consideration could also be given to the German example of a (exempting) withholding tax on capital gains (with loss set-off and a base exemption of € 1,000 per taxpayer).
