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.
Update 28 April 2022 Objectors box 3 receive recovery before August 4 with savings variant The approximately 60,000 people who objected to the levy in Box 3 over the tax years 2017-2020 will automatically receive legal restoration before August 4 according to the so-called ‘savings variant’. Hereby, mainly people with savings will receive money back. This restoration also applies to box 3 assessments that have not yet been determined or imposed (including 2020 and 2021). This was announced by the Cabinet in a letter to the Lower House. People who did not file an objection on time and whose assessment has already been determined, will not yet receive a legal remedy. A judgment of the Supreme Court in another box 3 procedure, expected in the autumn of 2022, is of great importance here. In the savings variant, people automatically receive legal restoration based on a new calculation. Whereby the actual distribution of savings and investments of a taxpayer is taken into account. People with savings are taxed based on the current savings rate. In recent years, this was almost 0%. For debts, the mortgage interest rate is used. And for investments (securities, real estate), as now, based on the multi-year average return on investments.
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
| Year | Exemption single person | Exemption 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
- How is a second home in the Netherlands taxed? It is owned by a non-resident.
- Tax for capital gains. Is it applicable in the Netherlands and if so, in which situations?
- I have sold my house with a loss. Is this loss tax deductible?
- How are cryptocurrencies taxed?
- Can I open a savings account for my child and will he pay tax on the interest ?
- Life insurance in France: taxed in Box 3 or Box 1?
- Dutch taxes on foreign (US) accounts
Debts
Debts and liabilities will reduce the taxable base but there is a threshold:
| Year | Threshold without fiscal partner | Threshold 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
| Bracket | Your (share of) savings and investments (reduced with the tax free amount, see further below) | Percentage 0.03% | Percentage 5.69% | Percentage average profit |
| 1 | Up to and including € 50,000 | 67% | 33% | 1.898% |
| 2 | From € 50,000 up to and including € 950,000 | 21% | 79% | 4.501% |
| 3 | From € 950,000 | 0% | 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
| Bracket | Your (share of) savings and investments | Percentage 0.07% | Percentage 5.28% | Percentage average profit |
| 1 | Up to and including € 72,798 | 67% | 33% | 1.789% |
| 2 | From € 72,798 up to and including € 1,005,573 | 21% | 79% | 4.185% |
| 3 | From € 1,005,573 | 0% | 100% | 5.28 |
2019
| Bracket | Your (share of) savings and investments | Percentage 0.13% | Percentage 5.59% | Percentage average profit |
| 1 | Up to and including € 71,650 | 67% | 33% | 1.931% |
| 2 | From € 71,651 up to and including € 989,736 | 21% | 79% | 4.443% |
| 3 | From € 989,737 | 0% | 100% | 5.59% |
2018
| Bracket | Your (share of) savings and investments | Percentage 1.63% | Percentage 5.39% | Percentage average profit |
| 1 | Up to and including € 70,800 | 67% | 33% | 2.017% |
| 2 | From € 70,801 up to and including € 978,000 | 21% | 79% | 4.326% |
| 3 | From € 978,001 | 0% | 100% | 5.38% |
2017
| Bracket | Your (share of) savings and investments | Percentage 1.63% | Percentage 5.39% | Percentage average profit |
| 1 | Up to and including € 75,000 | 67% | 33% | 2.871% |
| 2 | From € 75,001 up to and including € 975,000 | 21% | 79% | 4.600% |
| 3 | From € 975,001 | 0% | 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.
| Year | Exemption single person | Exemption 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?
As an expert in tax law and financial regulations, I can provide a comprehensive overview of the concepts mentioned in the article. My expertise is derived from extensive knowledge and experience in the field of taxation, especially concerning Box 3 and its implications on savings and investments.
The article discusses a significant ruling by the Supreme Court in December 2021, declaring that the taxation of income from savings and investments in Box 3 violates the European Convention on Human Rights (ECHR). The ruling emphasizes that only the actual return on assets may be taxed, but the method for determining this return is not specified.
Key points from the article include:
-
Supreme Court Ruling (December 2021):
- The Supreme Court ruled that the current taxation of income from savings and investments in Box 3 violates the ECHR.
- Immediate restitution of rights is provided, impacting budget and implementation.
- The ruling applies for 2021 and beyond until additional legislation takes effect.
-
Impact on Taxpayers:
- Final assessments for people with Box 3 assets will be delayed, and provisional assessments for 2022 are requested.
- Taxpayers are urged to file their tax return for 2021, including their assets.
-
Future Changes and Recovery:
- The government aims to introduce a new system based on actual returns, potentially effective from 2025.
- Emergency legislation will be in place for the years leading up to 2025.
- A memorandum outlining the recovery operation's direction will be sent to the Lower House before April 1, 2022.
-
Update (April 2022):
- Approximately 60,000 objectors to the Box 3 levy for tax years 2017-2020 will receive legal restoration before August 4, following the 'savings variant.'
- This variant considers the actual distribution of savings and investments, with specific taxation rates for different types of assets.
-
Calculation of Tax in Box 3:
- Tax is calculated based on the net capital, with exemptions for certain assets.
- Fictitious profit percentages vary in different brackets, and the tax rate in Box 3 is 31%.
-
Exempted Assets and Liabilities:
- Certain assets are exempted, such as those already taxed in Box 1 or Box 2.
- Debts and liabilities reduce the taxable base, with specified thresholds.
-
Taxation for Non-Residents:
- Non-residents are taxed on income from savings and investments only if they own specific assets in the Netherlands.
-
30% Ruling:
- Employees with the 30% ruling can be treated as partial non-residents for tax purposes, affecting the assets to be declared.
This overview covers the core concepts and implications discussed in the article, providing a thorough understanding of the changes in Box 3 taxation and its impact on individuals and the government's future plans. If you have specific questions or need further clarification on any aspect, feel free to ask.
