Wealth tax
The Netherlands wealth tax imposed a direct tax on net assets. Netherlands residents were taxed on their worldwide assets but could claim a tax-free threshold. Non-residents were taxed on their assets in the Netherlands but not entitled to the tax-free threshold unless their assets formed 90% or more of their total assets. A double taxation agreement with Belgium disapplied this restriction.
The claimant was German and therefore not allowed the tax-free threshold as his assets in the Netherlands were only 10% of his property. He appealed against this decision saying that it contravened article 56 of the Sixth Directive and the court referred to the European Court of Justice for a preliminary ruling.
The European court said that the legislation did not discriminate against non-residents who invested in property in the Netherlands. In Finanzamt Koln-Altstadt v Schumacker (Case C-279/93) [1995] STC 306 ...
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