Fundamental Tax Reform in The Netherlands

Sijbren Cnossen () and Lans Bovenberg

International Tax and Public Finance, 2001, vol. 8, issue 4, 484 pages

Abstract: The Netherlands has abolished the tax on actual personal capital income and has replaced it by a presumptive capital income tax, which is in fact a net wealth tax. This paper contrasts this wealth tax with a conventional realization-based capital gains tax, a retrospective capital gains tax with interest on the deferred tax, and a mark-to-market tax which taxes capital gains as they accrue. We conclude that the effective and neutral taxation of capital income can best be ensured through a combination of (a) a mark-to-market tax to capture the returns on easy-to-value financial products, and (b) a capital gains tax with interest to tax the returns on hard-to-value real estate and small businesses. Copyright Kluwer Academic Publishers 2001

Keywords: capital income taxation; capital gains taxation; tax reform; wealth tax (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (28)

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DOI: 10.1023/A:1011287428702

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