Box 3: savings and investments

Income from savings and investments: Box 3

Update: February 2022

On December 24, 2021, the Supreme Court ruled that the way income from savings and investments are taxed in Box 3 violates the European Convention on Human Rights (ECHR) and provided immediate restitution of rights in that case. According to the Supreme Court, only the actual return on assets may be taxed, but it is not specified how exactly this should be determined.

Taxes
The ruling has a major impact, budget-wise and for implementation. The ruling also applies – until additional legislation takes effect – for 2021 and beyond. Therefore, at this moment no final assessments will be sent to people with box 3 assets. This does not apply if an assessment is likely to be time-barred or if there is an interest for the taxpayer. These assessments will be reinstated as soon as there is clarity, and people will then be informed of this by the tax authorities.

Pending further decision-making, taxpayers are asked to pay the provisional assessments for 2022. They are also asked to simply file their tax return for 2021, including their assets. Because the solution will not be decided until later, the final 2021 assessments for people with box 3 assets will probably be imposed later than the normal date of 1 July. They will be notified of this. The ruling will of course be taken into account when determining the final assessment. If not, an objection can be filed.

Future
While working on recovery, the cabinet is also looking ahead. The cabinet wants to introduce a new system, based on actual returns. This could take effect as of 2025 at the earliest. To be able to do this, data is required from banks and insurers, among others, and the tax authorities systems must be adapted. For the intervening years up to 2025, the Cabinet is working on adjustments via emergency legislation. The Cabinet will send a memorandum outlining the direction of the recovery operation to the Lower House before 1 April 2022.

Taxation on income from savings and investments is in the Netherlands based on the assumption that people will have a certain taxable return on their net capital. The actual level of return (for example interest, dividend, capital gains or losses) is not relevant. Net capital (the value of the assets minus any liability) is determined once a year, on January 1. Only capital available for savings and investment is taken into account. Consequently, the owner-occupied dwelling as well as the endowment insurance linked to it and capital invested in someone’s own company or in a substantial interest are not taxed in box 3. Tax rate in box 3 is 31% (before 2021 it was 30%).

Calculation:

Assets on 1 January
-/- Debts on 1 January
—————————— =
Net capital
-/- Tax free amount
—————————— =
Tax base * percentage fictitious profit * 31% (tax rate) = tax to be paid

Assets

Examples of assets taxed under box 3 are:

  • bank and savings accounts;
  • a second home;
  • stocks and other shares;
  • endowment insurance policy which is not linked to an owner-occupied dwelling.

Exempted assets

Certain assets are exempted. The most important are:

  • assets which are already taxed in box 1 or box 2 (for example your own home, business assets or an annuity or pension insurance if the premiums are deductible);
  • movable property for personal use (household items, like a car);
  • investments in forests and nature;
  • objects of artistic or scientific nature unless these serve as an investment;
  • green investments (environmentally friendly investments) up to a certain amount (see below).

Exemption for green investments

YearExemption single personExemption fiscal partners
2021€ 60,429€ 120,858
2020€ 59,477€ 118,954
2019€ 58,540€ 117,080
2018€ 57,845€ 115,690
2017€ 57,385€ 114,770
2016€ 57,213€ 114,426

FAQ

Debts

Debts and liabilities will reduce the taxable base but there is a threshold:

YearThreshold without fiscal partnerThreshold with fiscal partner
2021€ 3,200€ 6,400
2020€ 3,100 € 6,200 
2019€ 3,100 € 6,200 
2018€ 3,000 € 6,000 
2017€ 3,000€ 6,000
2016€ 3,000€ 6,000

Except for tax liabilities and liabilities related to capital generating income from work, home or a substantial interest, all liabilities can be deducted from the assets.

FAQ

Are certain assets exempted from taxation in Box 3?

Fictitious profit

From 2001 till 2016 the percentage of the fictitious profit was 4%. So till 2016 the tax to be paid was 4% * 30% = 1.2% of the taxable equity. Since 2017 this is changed. There are now 3 brackets. The more savings and investments you have the higher the percentage can be. The percentage depends on the type of asset. The tax rate is raised to 31% in 2021. It is a complicated calculation.

2021

BracketYour (share of) savings and investments
(reduced with the tax free amount, see further below)
Percentage
0.03%
Percentage
5.69%
Percentage average
profit
1Up to and including € 50,00067%33%1.898%
2From € 50,000 up to and including € 950,00021%79%4.501%
3From € 950,0000%100%5.69

How is the fictitious profit calculated?

In bracket 1 a percentage of 0.03% is calculated over 67% of the equity and 5.69% over the remaining 33% of the equity.

In bracket 2 a percentage of 0.03% is calculated over 21% of the equity and 5.69% over the remaining 79% of the equity.

In bracket 3 a percentage of 5.69% is calculated over 100% of the equity.

2020

BracketYour (share of)
savings and investments
Percentage
0.07%
Percentage
5.28%
Percentage average
profit
1Up to and including € 72,79867%33%1.789%
2From € 72,798 up to and including € 1,005,57321%79%4.185%
3From € 1,005,5730%100%5.28

2019

BracketYour (share of)
savings and investments
Percentage
0.13%
Percentage
5.59%
Percentage average
profit
1Up to and including € 71,65067%33%1.931%
2From € 71,651 up to and including € 989,73621%79%4.443%
3From € 989,7370%100%5.59%

2018

BracketYour (share of)
savings and investments
Percentage
1.63%
Percentage
5.39%
Percentage average
profit
1Up to and including € 70,80067%33%2.017%
2From € 70,801 up to and including € 978,00021%79%4.326%
3From € 978,0010%100%5.38%

2017

BracketYour (share of)
savings and investments
Percentage
1.63%
Percentage
5.39%
Percentage average
profit
1Up to and including € 75,00067%33%2.871%
2From € 75,001 up to and including € 975,00021%79%4.600%
3From € 975,0010%100%5.39%

Tax free amount – exemption

Each resident tax payer is entitled to a tax free capital threshold of a certain amount. Depending on their income and amount of capital, people aged 65 and over are entitled to an extra threshold of 50% of their net capital up to a certain maximum.

YearExemption single personExemption fiscal partners
2021€ 50,000€ 100,000
2020€ 30,846€ 61,692
2019€ 30,360€ 60,720
2018€ 30,000€ 60,000
2017€ 25,000€ 50,000
2016€ 24,437€ 48,874

Taxation of non-residents

Non-residents are taxed on income from savings and investments only if they own certain assets in the Netherlands, which are:

  • immovable property (including immovable rights) situated in the Netherlands;
  • profit-sharing rights based on the net profits (not the turnover) of a company managed in the Netherlands, excepting profit-sharing bonds, etc., and employees’ entitlement to bonuses.

The assets mentioned are reduced only by liabilities directly related to them (such as debts secured by a mortgage on immovable property situated in the Netherlands).

30% ruling

If the 30% ruling is granted the employee can choose to be treated as a partial non resident for tax purposes and as a consequencs only the above mentioned specific assets will have to be declared in the Dutch tax return. The assets mentioned under “Taxable assets” will not have to be declared in this situation.

What needs to be declared when the 30% ruling ends during the year?

If the 30% ruling ends during the year you will no longer be a partial non resident for tax purposes anymore from that moment. This means that you become liable for tax on your income from savings and investments. This will however lead to a somewhat complex situation which can’t be handled by the tax software.

The procedure is that you have to calculate your taxable income from savings and investments the regular way based on the values on 1 January of the year in which you lose the 30% ruling. Even though you had the 30% ruling on 1 January. And even if the savings are much less on the day the 30% ruling ends compared to what it was on 1 January. To prevent that tax is paid over the period you had the 30% ruling the calculated taxable income can be reduced pro rata. So if the 30% ruling ends on 30 April the calculated taxable income is multplied by 8/12. This is not something which the tax software really understands, but it is the right way to do it. Commercial tax software does allow a work around. The tax software of the tax authorities however may be stubborn to allow the adjustment. If it doesn’t work out and you can only declare a full income for the entire year, you can always object against the tax assessment. Challenge already is that the tax software of the tax authorities do not contain a question about the 30% ruling, unlike commercial tax software.

FAQ

Bank savings and 30% ruling. Foreign bank accounts. What to declare?

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43 Comments

  1. I have been living and working in the Netherlands for over 3 years now. I do not own any properties nor hold any debts. I have a bank account + savings account which totals more than 30,840 euros. I am a bit worried because I don’t remember how much my total savings was exactly on 1 January 2020, it could have been slightly more than 30,840. Probably around 32,000 euros.

    Now, I would like to know how much I am going to be taxed for this next year?

    Also, what would be your recommendation to reduce this in the future?

    1. Your taxable assets are first reduced with the tax exemption of € 30,846. The difference is then taxed as explained above:

      In bracket 1 (up to and including € 72,798) a percentage of 0.07% is calculated over 67% of the equity and 5.39% over the remaining 33% of the equity. This is average 1.789%.

      This leads to a taxable profit of € 32,000 – € 30,846 = € 1,154 * 1.789% = € 21. Tax rate is 30% which leads to a tax amount of € 6.

      In my opinion you don’t have to take drastic decisions to reduce the tax looking at the small amount. Otherwise the options are mentioned in the article above under Exempted assets.

  2. Is there a minimum lock-in period for green investments needed to have it exempted from Box 3 ? If so, how long ?

    1. There is no minimum lock-in period for green investments, although the provider of the green investments can have certain requirements to prevent that they have to make a lot of costs for a short term investment only. There are anti-abuse measures if you would decide to move money between boxes for a short period. But moving money between normal investments and green investments in box 3 are not treated as abuse.

  3. Hello, I’ve been leaving in the Netherlands for almost 5 years but still have my house in my country of origin, in July 2021 I will also loose my tax ruling benefit, how will my assets be taxed ? Especially with regards of my house abroad

    1. Once you lose the 30% ruling you will be treated as full tax resident and have to declare your world wide savings and investments in your Dutch tax return. In almost all tax treaties the right to tax a property is given to the country in which the property is located. That means you can then claim an exemption again for the same amount in your Dutch tax return to prevent double taxation. So your foreign property should not result in tax to be paid in the Netherlands.

  4. Hi Arjan,

    Not sure if I fully understand the deduction from the debt.
    I borrowed €100.000 from my family for investment in foreign funds. By the end of the year I received €10.000 interest. What is taxable in my case? Thank you!

    1. Taxed is the value of the foreign funds on 1 January of the tax year minus the amount you borrowed corrected with a threshold of € 3,200 (for a single person in 2021) and that result is reduced with the applicable tax free amount. The interest you received is irrelevant just like the interest you paid on the money you borrowed. Taxation is purely based on the value. So if the value of the funds is € 150,000 then the taxable amount is € 150,000 -/- € 96,800 = € 53,200 -/- € 50,000 (for a single person) = € 3,000.

  5. And if the interest from the fund is €35.000 but I spent all of them, no balance left in my account. Would I be taxed for the full amount of the interest?

    1. The interest itself is not taxed but if it is still on your account (or owned in cash) then it is taxed as part of your assets.

  6. Hello,

    I was wondering what is the procedure in terms of cryptocurrencies (i already had investment before I got to NL, but i did trading in the meantime). Their value at 1.1.2020 was let’s say 1.000 eur, and on 1.1.2021 is 2.000 eur). Do i need to report any capital gains, and what amount is reported for upcoming tax report?

    Thank you in advance,
    Sorry for very particular case

    Alex

    1. Trading is in principle seen as normal asset management, not as profit from business since the investor/trader is not able to influence the value of the asset. Under asset management a capital gain is not taxed. Only the fictitious income which is calculated every year. For more info about the taxation of cryptocurrencies see https://expatax.nl/taxation-of-cryptocurrencies/.

  7. Hi! i made investments in CFDs through online trading app (capital.com). The CFDs were European and US equity based. I made a profit of around 2000 through 2020. I have 30% ruling. Do i need to declare this?

    1. No, since you have the 30% ruling you don’t have to declare these assets (nor other trading investments, bank accounts, deposits etc.)

  8. Hello, I have an investment fund and was wondering if its something that is paid annually or just once i pull out?

    1. Tax in Box 3 is paid annually, in your annual income tax return. Tax is based on the assets you own on 1 January of the tax year. You don’t pay income tax on your investments during the year but it may be that there is tax withheld at source like dividend tax. The dividend tax can be credited in the income tax return.

  9. Hi Arjan,
    I’m a skilled worker in the Netherlands who benefits the 30% ruling. In addition to that I’m also exchanging crypto currency on various platforms and wanted to know how taxation works around that in my case here?

    Thanks in advance for your kind assistance.

  10. Thank you for the article and all your answers!
    I have a question concerning Box 3 taxation:
    If I hold foreign shares and receive dividends from them (USA in my case) and pay dividend tax in the foreign country, how does this fit into Box 3 in the Netherlands? Do I receive a credit for the tax paid on the dividend? Or are dividends taxed in another way?
    Same question for capital gains: if I have been paying Dutch Box 3 tax and then I sell my US shares and pay capital gains tax in the US, can I receive a credit for this in the NL?

    I appreciate your time. I have done some research and even contacted to law firms (who never called back).

    1. If you don’t have the 30% ruling and the shares are therefore taxed in the Netherlands in Box 3 then you can claim a credit for the tax withheld by the other country. There is a maximum tax percentage applicable, depending on the relevant tax treaty, but in principle this is 15%. If more is withheld you can try to claim the difference back in the other country. The credit (of maximum 15%) can be claimed against the tax calculated on all your Box 3 income.

      We don’t have a capital gains tax in the Netherlands (in Box 3). This tax can’t be credited on your Dutch Box 3 income. But in the US tax return you may claim the Foreign Tax Credit.

  11. Ah, and final question: how is foreign-source rental income taxed? Does it fall under Box 1 income tax or Box 3 tax?

    1. If the property is located outside the Netherlands then the income is in principle taxed in that country. The Netherlands would then exempt the property to prevent double taxation. Unlike bank accounts a property is physically more linked to a specific country and based on the tax at source principle the property is taxed where it is located. This is general practice in international tax treaties.

  12. Thanks for this article.
    I have the 30% ruling but I have a Dutch nationality (I’ve lived abroad for many years). If I understand correctly I will not be taxed on money in the bank in the Netherlands or abroad. If I purchase a house as an investment, however, I will be taxed on its value. Am I correct? What about my wife if we have a joined bank account?

    1. Correct, as long as you have the 30% ruling you don’t have to declare your (Dutch and foreign) bank accounts in your Dutch tax return. This also includes the joint account if you divide it to you in your tax return (which technically is not possible since you wouldn’t have to declare the bank account, so you just leave it out). Excluding a joint account is of course only possible if you are fiscal partners, which you automatically are if you are married. If you invest in property in the Netherlands, which would not be your principle residence but an investment, then you will have to declare this property in Box 3. The 30% ruling has no effect in that case. The return on investment difference between investing in property or in something else will show what is financially more interesting taking the 30% ruling applicablity in account.

  13. Let’s say I want to invest 5 thousand euros in an ETF and leave it for 30 years.

    In 2021 there is probably no tax on this money (because it is less than 30 thousand tax free investment that is allowed per individual)

    If my 5 thousand euros has increased to 80 thousand euros due to humongous returns of the ETF by the end of the year. So in 2022 I need to pay tax on 50 thousand euros? (80.000 – 30.000)

  14. Thanks for the article. I am an expat living and working in the Netherlands without the 30% ruling. I would like to invest in the stock market through an Italian bank account (my country of origin). In this case, where will I have to pay taxes? In Italy the income gain is generally taxed.

    1. Since you are living in the Netherlands you will have to declare your world wide income in your Dutch tax return, including your Italian bank account. According to the tax treaty between the Netherlands and Italy the right to tax savings is divided to the country where you are living, which is the Netherlands. Italy should offer an exemption to prevent double taxation, but they are allowed to withhold a tax at source of 15% on interest received on your savings for which you will then receive a tax credit in the Netherlands. The same applies if you receive dividend which is linked to investments held in Italy. If the stocks are held outside Italy then you only have to deal with Dutch tax regulations (where there is no capital gains tax for individuals, yet).

  15. I have the 30% ruling. Do I need to declare savings in other EU bank accounts? Also, do I need to declare stocks that produce dividends (not in NL)? Thanks.

    1. As long as you have the 30% ruling you don’t have to declare savings and stocks (as investment) in your Dutch tax return, no matter where they are held. Only if you own more than 5% of the stocks in a company then you will have to declare these as income from substantial interest in Box 2.

  16. Hi,
    i’m an US expat, with 30% ruling, living in the Netherlands and married a dutch husband mid 2021.
    We both have separate bank accounts. If we file taxes jointly, can i then put my savings saldo to zero?

    And can we distribute some of my husband’s savings to me on paper to pay less taxes? or does it have to stay separated since we married after 2021 jan 1st?

    Thanks

    1. Because you are married you are automatically fiscal partners. Fiscal partners can divide income in Box 3 the way it is most beneficial. Since you have the 30% ruling and are exempted to pay tax on your savings it would be best if you divide all savings to you in your tax return(s). This includes joint accounts and accounts in the name of your husband. Result is that neither you nor your husband pays tax on the savings.

  17. Hi,

    I thought I had posted a question but seems it is lost somewhere. I again put up my question as below for your kindly providing the response:

    If one gets 30% ruling effective 1st December 2021 then he is not required to declare global investment and no tax is required to be paid as he can opt for partially non-resident in Netherlands. My question is that what happens on the global investment held on 1.1.2021. Is it true that 30% ruling applies for tax year that starts from 1.1.2021 till 31.12.2021. In that situation does he need to declare assets on 1.1.2021 and also pay tax if exceeding threshold limit. If, one needs to declare assets on 1.1.2021 because on that day, there was no 30% ruling, then I have a second question as below.
    Second question is that if dividend and interest income on investments and savings were already taxed in the country of origin, then will there be any tax on box 3 investments or this will be exempt.

    Best regards,

    Ramesh

    1. If the 30% ruling is granted effective from 1 December then the exemption to declare (certain) income in Box 3 is valid from that date as well. If you were already in the Netherlands before 1 December then taxation in Box 3 is calculated pro rata based on the assets on 1 January of the year. If tax is withheld in the country of origin on dividends or interest then this advance tax can be credited against Dutch tax up to 15%. If you arrived in the Netherlands around 1 December for the job for which the 30% ruling was granted then the exemoption will cover the whole year since you were not taxable in the Netherlands at all before your arrival.

  18. Very helpful, but also confusing. Capital earnings from my country of origin are not taxed there since my expatriation to the Netherlands. As I am under the 30% rule, it seems like they do not have to be declared here either. Is that simply a gap in the legislation or am I missing something here? It shouldn’t be possible to avoid taxation …?

    1. It is indeed a ‘gap’ in legislation. The Dutch tax authorities treat you as deemed non resident for tax purposes if you have the 30% ruling and ‘assume’ that you will pay tax on your savings and investments in your country of origine. But there is no check or requirement that tax is indeed paid in the country of origine. This consequence of non taxation is accepted on purpose.

  19. Hi,

    Where one informs that he has the 30% Ruling in the Tax Declaration?

    Those who have 30% Ruling can opt to be treated as (partial) non-resident for taxes in boxes 2 and 3 – so, it is my understanding that they don’t need to pay taxes on box 2 and 3, except for immovable property in NL and substantial interest/profit share rights of a Dutch Company.

    However, when someone declares all the worldwide assets/incomes (as requested), the Belastingdienst calculation shows taxes to be paid in box 2 and 3! So, how to make sure it understands that the person has the 30% ruling (or how do this person opt to be treated as tax non-resident)?

    Or should this person simply do NOT DECLARE anything in box 2 and 3 during the 5 years of the 30% ruling (I mean, should he leave all blank – even though having bank accounts/financial investments in NL and other European country, as well as an apartment abroad)?

    Thanks

    1. It is not possible to mention anywhere in the tax return that you have the 30% ruling. You can indeed opt to be treated as (partial) non resident for taxes in box 2 and 3 by not declaring your savings and investments which are not related to immovable property.

  20. Hi,
    I have the 30% ruling. When filling the tax return form (Form-P), I can see my bank account information in the pre-filled data section and the balance is higher than the Box 3 limit. I’m aware that I don’t have to declare the savings in Box 3 during 30% ruling. There is no way to remove the pre filled bank account but the amount could be overwritten as 0. So, what is the right way of “not declaring” savings in the tax return form?
    Thanks.

    1. The option would indeed be to change the amounts to zero. The pre-filled accounts can’t be deleted from what I remember. May be you can also add an extra row with the accounts and then a negative amount so that the total becomes zero.

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