The box 3 tax (income from savings and investments) has been under attack for a long time. Instead of levying tax on capital gains in the Netherlands, the Dutch tax authorities assume a fixed return. This fixed return is the same for everyone, depending on the height of your total assets. Good news for people who realize high profits on their assets, but unlucky for people who have money in a savings account or have a negative return on their shares. For them, the fixed return is much higher than their capital gains. After the judgment of the Supreme Court (Hoge Raad), this will change: the unfair box 3 taxation will come to an end.
Fixed return box 3
Not your entire box 3 capital is taxed. In 2022, there is a tax-free capital of €50,650; in 2021, this was €50,000 (for tax partners, it’s doubled). A fictitious return is calculated on the amount above the tax-free amount. In the table below, you will find the tax rates for 2022 (the rates are slightly decreased compared to 2021):
| Assets | Fixed return | Taxation (31%) |
|---|---|---|
| €0 – €50,650 | – | 0% |
| €50,650 – €101,300 | 1.82% | 0.56% |
| €101,300 – €1,013,000 | 4.37% | 1.35% |
| More than €1.013.000 | 5.53% | 1.71% |
Supreme Court rules on box 3
On December 24, 2021, the Dutch Supreme Court ruled on the massive objection procedure against the current tax regime of box 3. They decided that the box 3 tax is a violation of the European Convention on Human Rights (ECHR). According to the ruling, only the actual return may be taxed.
Did you object to the assessment of 2017, 2018, 2019, and/or 2020?
On February 4, 2022, the Dutch tax authorities indicated that all objections were well-founded. But only if you objected within 6 weeks of the final assessments: the so-called massive objection procedures. For them, the fixed return on the box 3 capital must be replaced by the actual return. The objectors must hear something within 6 months (i.e. before August 4, 2022), but there is a good chance that this deadline will not be met. It’s uncertain yet whether the ruling affects all taxpayers or only the taxpayers who joined the objection. We hope that the Dutch tax authorities will clarify soon.
Future of box 3: capital gains tax
We are not yet 100% sure, but the intention is to introduce a capital gains tax system. This makes the box 3 tax fair for savers, who have to pay too much tax on their savings due to the current system.
The coalition agreement of the Rutte IV cabinet states that from 2025 the actual profits will be taxed in box 3. From 2023, the tax-free allowance will increase considerably: in 2022, this is €50,650; in 2023, this will be €80,000. However, due to the ruling, it could also be the case that the government will take quicker action concerning the taxation of actual returns.
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