Outline of gift and inheritance tax measures and taxes on legal transactions
2018 Tax Plan - Budget Day (Prinsjesdag)
The following lists the measures proposed in the 2018 Tax Plan in respect of the gift and inheritance tax measures and taxes on legal transactions.
30 November 2017
- Gift on change in matrimonial property system
- Formal rules
- Digitalisation of notarial deeds
- Increase in tax on games of chance
- Tax period for tax on games of chance
Gift on change in matrimonial property system
The government had proposed a statutory regulation to determine whether a change in matrimonial property system results in a gift between spouses. The assumption is that bringing about equal entitlement to the joint capital does not lead to taxation. However, gift tax would be due if the share of the spouse with the smallest part of the capital were to increase up to over 50%, or the share in the total capital of the spouse with the largest part of the capital were to increase. The House of Representatives has now cancelled this part of the “2018 Other tax measures” and called for the government to come up with a fairer regulation that does not affect well-intentioned citizens.
A proposal is made to also permit additional gift and inheritance tax assessments if an additional tax assessment is imposed on the same acquiring party relating to reduction of a tax assessment. This particularly involves situations where a protective additional assessment is to be imposed relating to reduction of an “ordinary” assessment (for instance, as part of the business succession scheme) or vice versa. In those cases, the requirement of a new fact that applies for additional assessments is not considered to be desirable, since the assessments are interconnected.
The legislature further wants to have gift tax assessment periods start after the day on which the related tax returns were submitted if this is done more than four months after the end of the calendar year. This is to avoid tax returns being submitted many years later, so the assessment periods have expired. Current legislation only seems to provide a solution in that situation if the Tax Inspector has invited the taxpayer to file a tax return, but this is not done in all cases.
Both measures should take effect immediately. With that, the new rules will also apply to current assessment periods.
Digitalisation of notarial deeds
Several measures are proposed as part of the digitalisation of recording of notarial deeds. The Tax Administration should have digital access to wills or similar deeds in those cases in which a testator dies after the deed has been transferred to the general repository for notarial deeds. In those cases, an electronic copy of the deed is registered. On top of that, the Tax Administration also electronically receives any records that have been attached to the notarial deed.
Increase in tax on games of chance
It has also been proposed to temporarily raise the rate for tax on games of chance from 29% to 30.1%. This increase should cover any budgetary losses to be incurred because of the delay in introduction of the measures under the bill on e-games of chance. The proposal provides for a reduction of the rate to 29% six months after the said bill has become effective.
Tax period for tax on games of chance
A lottery must withhold tax on games of chance at the time a price is made available to the player. This tax is then to be remitted to the Tax Administration on filing a tax return within one month after that date. The government now proposes that institutions may under certain conditions file monthly or quarterly tax returns.
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