Box 3 tax: everything you need to know!

The criticism of the box 3 tax recently will probably not have escaped you. The criticism is about the fact that savings do not yield anything for years now, while the return in box 3 is much higher.

In The Hague, they listened to this criticism and made adjustments to the brackets and rates, aiming to make it fairer for ‘small’ savers. What does that mean for your 2021 tax return? We discuss this further in this article.

The 30% ruling

Your capital: what does it consist of?

Before we discuss the box 3 tax, it is wise to know what your box 3 capital is based on, namely the value of your assets – debts. For your assets, think of savings, investments, a second house, and shares/options that are not taxed in box 2. For debts, you can think of a negative bank balance, the remaining mortgage on your second home, or other debts. A threshold of € 3,200 applies to debts.

It is also good to know that the reference date is the 1st of January of each year.

Notional return over the years.

It used to be the case that the Dutch tax office calculates a fictitious return of 4%, on which a tax of 30% was calculated. This amounted to (30% x 4%) 1.2% tax. As you may understand, this is not entirely fair to small savers. In the current situation, the percentages change every year.

What will stay the same is that a notional return is calculated on your capital, in which it does not matter how much return you actually achieved and how you allocate your capital.

What did change in the box 3 tax is that there are now three brackets, based on your capital above the exemption of € 50,000 in 2021, each with its own ‘capital mix’.

This capital mix means that the Dutch tax office assumes a certain ratio between savings and investments. But what do you actually need to pay on box 3 tax? You can calculate this using the table below.

Capital more thanCapital no more thanNotional returnTax rate (31% in 2021)
€ 50,0001.90%0.59%
€ 50,000€ 950,0004.50%1.40%
€ 950,0005.69%1.76%

As you may have noticed, the notional return becomes higher as your income increases. Thus, the tax office assumes when you have more capital, you also earn more from this (e.g., shares or a second house). The table calculates the capital above the tax-free part of € 50,000 in 2021.

Especially for tax parters: allocation

When you have a tax partner, there is an advantage: you have to divide your capital. The Dutch tax office automatically divides the assets 50/50 between you two. When you split your capital, both of you utilize the tax-free part and the first bracket (which, of course, is lower). But beware: this does not immediately mean that the 50/50 distribution is always the most optimal allocation. For example, this has to do with tax credits that have not yet been fully used. You can read more information about the optimal allocation for tax partners here.

We are happy to help!

Do you still have questions regarding the box 3 tax? Or are there other tax-related matters that you can use our help with? We are happy to help you! Feel free to contact us using our information below.

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