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Did you save a lot of money in recent years, did you recently buy a second house or would you like to build up more capital? Then it is wise to read more about the tax treatment of assets. This can affect the development of your assets and how much it costs you.
Box 3
It is important to know that your assets are taxed in box 3. Box 3 has a different taxation system than boxes 1 and 2. In box 1 and 2, tax is levied on the income actually received and profit respectively.
Box 3 does not have this system and does not tax your assets according to the income you actually received from it. Box 3 calculates a notional return on your capital. This notional return is taxed against 31%.
How do you determine your capital? In order to answer this question, you need to look at what your assets are and what the cohesive debts are. Leave your details in our online contact form or call us at +31 (0)20 – 2170120 and we will get in touch to see if we can help you with filing the tax return.
Your assets include the following
- Bank and savings balances. Also foreign bank and savings balances.
- Shares, bonds, profit-sharing certificates, and options that do not belong to substantial interest.
- Receivables, such as money lent and cash.
- A second house, for example, a holiday home.
- Other immovable property, for example, a house that you rent out.
- The non-exempt part of your endowment insurance policies.
- Rights to periodic benefits that are not taxed in box 1.
- Other assets, such as your share in the assets of an Owners Association and cryptocurrency.
- Subsequent payments of allowances: you state these as other receivables.
How do you determine the value of your assets?
You use the market value. This usually means the sales value. If that is not possible, then you have to estimate. The reference date of the assets (both assets and liabilities) is January 1 of the year of declaration.
Debts
- Debts for consumption purposes, such as a car or a holiday.
- A negative balance in a bank account.
- Amounts payable for the financing of shares (except shares belonging to substantial interest, bonds, or rights to periodic distributions).
- Current account debt with your company if the debt is higher than € 17,500. You do not give up the debt if the debt does not exceed $ 17,500 throughout the year.
- Debts for the financing of the second house or other immovable property.
- (mortgage) Debts that you may not deduct in box 1 because the debt is not part of the home acquisition debt.
- Debts according to the Student Finance Act (student debts), unless the student debt can still be converted into a gift.
- Amount of lifelong learning credit that you must repay.
- Amount of the personal budget that you must repay.
- Inheritance tax.
- A debt arising from a donation on paper.
- Amounts in allowances that you must repay.
Amount of the notional return
As mentioned at the beginning, capital is taxed on the basis of a notional return. The tax authorities assume that the more capital you have, the more returns are achieved.
There are three categories:
- Assets up to € 50,000. In the first category, you get a return of 0.03% on 67% of your assets and a return of 5.69% on the remaining 33%.
- Assets from € 50,000 to € 950,000. On the second write, you get a return of 0.03% on 21% of your assets and a return of 5.69% on the remaining 79%.
- Assets from € 950,000. On the third write, you get a return of 5.69% over 100% of your assets.
You pay 31% tax on the calculated return.
Tax-free capital
Part of your assets is exempt from tax. The amount of this tax-free allowance is €50,000 in 2021. Do you have a tax partner? Then this tax-free allowance will double to €100,000.
So, for the calculation of the tax, you first have to calculate the assets and liabilities. You then deduct the tax-free portion thereof and what remains will be used as the tax base.
Do you have a large capital that consists of savings?
Initially, the assets fall into box 3. However, this is not necessarily the case. There is a choice to put your assets in box 2. This is the case if you have a lot of savings. As stated above, the savings are taxed at a notional return. Currently, savings do not pay off and, in some cases, it will even cost you money.
If you have a lot of savings, it is advisable to place these savings in a Besloten Venootschap (Private Limited Liability Company). The actual return received from the savings in the bank is often a lot less than the notional return with which box 3 works. This results in the fact that you pay more tax on your savings than you actually earn with them.
What is the advantage you get from moving the savings to a private company? In this case, your actual return is taxed instead of your notional return. A tip is to use the full tax-free capital in box 3 and to place the remaining savings in a BV.
We are happy to help!
Do you have questions about box 3 or the notional return? Or do you have other tax-related questions? We are happy to help! Please contact us using our information mentioned below.
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+31 (0)20-2170120