Cabinet to postpone Box 3 plans by one year, allocate €350 mil. for tax relief

After hours of deliberation, the coalition parties D66, VVD, and CDA have reached an agreement on adjustments to next year’s tax plan and the introduction of a capital gains tax in Box 3. Insiders told RTL Nieuws that the government was allocating €350 million for tax relief. The Box 3 changes will be postponed by one year, sources told NOS. They also said that the coalition is still refusing to align itself with either the left-wing or right-wing and is holding out hope for broad support.

The Cabinet will hold an extra Council of Ministers meeting on Tuesday morning, and then submit the proposals to parliament. The Tweede Kamer, the lower house of the Dutch parliament, will debate the tax plan on Wednesday evening.

In recent weeks, the minority Cabinet tried to guarantee a majority in advance by pursuing agreements with opposition parties. The Council of State complicated the task of securing a majority even further on Monday with a very critical opinion on the Cabinet’s Box 3 plans. It called the proposal rushed and the plan to implement a capital gains tax on most, but not all, assets in 2028 “irresponsible.”

Despite repeated discussions with the opposition parties, there were no breakthroughs. The left-wing bloc of Pro and Volt sought to increase the tax burden on investors while reducing it for workers. The VVD won’t support that.

The right-wing bloc of JA21, SGP, and BBB demanded an end to the government being able to oblige municipalities to take in asylum seekers, major changes to nitrogen policies, and stricter regulations on abortion and surrogacy. These demands went too far, particularly for the D66.

According to NOS’s sources, the agreement reached by the coalition parties includes certain concessions for the opposition parties, primarily in the form of additional tax relief for citizens. But the parties insist that they do not constitute a choice to align with either the left or the right wing.

So the tax plan will be decided upon during the parliamentary debate on Wednesday. Entering the debate without a clear prospect of a majority carries significant risks for the Cabinet. If the tax plan is voted down, the national treasury will lose out on around €2.5 billion in tax revenue next year, the Telegraaf calculated.