In the Netherlands, there is officially no wealth tax, but there is a tax on investment income, known as the “savings and investment tax”. You pay a levy on the return on your savings and investments. This tax is detailed in Box 3 of the income tax. You pay tax on the return of assets, which is reduced by the return on debts. The primary residence is not included, but a second home or vacation home is. The levy is not paid on the actual returns made; instead, the government determines what returns you should have made (assumed returns).
Tax-exempt Allowance (Heffingsvrij vermogen)
Everyone has a tax-exempt allowance for their assets, which is not subject to taxation. For 2023 and 2024, the tax-exempt allowance is set at €57,000 per person, and for 2022, it was €50,650. Therefore, no tax is paid on this amount. If you have a Dutch tax partner (fiscale partner), then you pay no tax on the combined amount, which is double that of the individual allowance.
Assumed Return (Forfaitair rendement)
It does not matter whether the interest rate on your savings account is 0%, 1%, or 5%, or what actual returns you achieve. Legally, your return is calculated based on what it is supposed to be, known as the “assumed return.” The Tax Authority attempts to use percentages that are close to the average actual return percentages for savings and investments. For this, a more complex calculation is made, after which a return percentage is conjured up: this is then considered your return. This calculation uses three asset classes: savings, investments/other assets, and debts. Cryptocurrencies fall under other assets, as does a second home. The percentages change every year. You then pay tax on the assumed return at a rate of 32% in 2023 and 36% in 2024.
Table of Assumed Percentages Box 3 New Method
For calculating the tax on Box 3 income, there are two methods: an old and a new one. In this article, we discuss the new calculation method. When filing tax returns for the years 2021 and 2022, we also calculate using the old method and apply the most advantageous method for our clients.
| Capital | 2024 (provisional) | 2023 | 2022 |
|---|---|---|---|
| Savings | 1.03% | 0.92% | 0.00% |
| Investments/Other Assets | 6.04% | 6.17% | 5.53% |
| Liabilities | 2.47% | 2.57% | 2.28% |
The reference date for the valuation of assets is January 1st. This means that the value of the assets and debts must be taken as of January 1st. Additionally, there is a threshold amount for debts: €3,400 in 2023 and €3,700 in 2024 per adult.
Step-by-Step Plan
- Determine the return of each type of capital on January 1st using the percentages in the table.
- Add the return from savings to the return from investments and other assets. Reduce the total by the return from deductible liabilities.
- Calculate your capital by reducing the total of your assets with your liabilities.
- Determine the yield percentage by dividing the calculated yield by your capital.
- Reduce your capital with the tax-free capital to calculate the savings and investment base.
- If you have a tax partner, you can split the base between you. Multiply the return percentage by your share in the savings and investment base to calculate the savings and investment benefit.
- You pay 31% tax on the benefit from savings and investments in 2022, 32% in 2023, and 36% in 2024.
Calculation Example for 2023
Suppose you have €100,000 on January 1, 2023: €50,000 in your savings account and €50,000 in stocks. You do not have a fiscal partner or any debts. The calculation for 2023 would then be:
- Calculate the return on your savings: €50,000 * 0.92% = €460. Calculate the return on your investment accounts: €50,000 * 6.17% = €3,085.
- Calculate your total return: €460 + €3,085 = €3,545.
- Calculate your assets = €100,000.
- Calculate the return percentage: €3,545 / €100,000 = 3.545%.
- Basis for savings and investments: €100,000 – €57,000 = €43,000.
- Calculate your benefit from savings and investments: 3.545% * €43,000 = €1,524.35.
- Calculate the tax: €1,524.35 * 32% = €487 (rounded).
Therefore, ultimately, the return on your savings and investment accounts would be €3,545, and you would have to pay €487 in tax on this return in 2023.
Note: as noted above, there are two methods for calculating tax on Box 3 income: an old and a new one. In this article, we discuss the new calculation method. When filing the tax returns for 2021 and 2022, we also calculate using the old method. Subsequently, we use the most advantageous method for all our clients.
Unfair
Many people find this tax on investment income unfair. On one hand, because tax has already been levied on the savings when it was earned, for example, in the form of salary or profit. People who spend the money right away do not have to pay Box 3 tax on it. This discourages saving and encourages consumption instead. On the other hand, the levy can be seen as unfair because it does not take into account the actual return, but assumes a fictional return. This means that someone who achieves poor returns on the stock market is at a disadvantage compared to people who achieve good returns: both pay the same tax.
Avoidance
Tax on savings is avoided in a number of ways, one of which is by setting up a private limited company (BV in Dutch). Of course, there are then startup and maintenance costs to be paid. A BV is liable for corporate tax on the actual results, and you must file a corporate tax return. This structure makes sense when your return is less than the assumed return. Besides setting up a BV, there are of course other ways to reduce tax on savings, such as purchasing a property abroad. We can handle the tax declaration of your foreign property, but in the Netherlands you usually pay almost no tax on it.
Declare your savings and other assets through the income tax return (aangifte inkomstenbelasting). Let us at Taksgemak handle it for you. It’s much easier that way.
About the author: Kelly Hendrikse blends her interest in entrepreneurship with her expertise in tax advice at Taksgemak. She assists both businesses and individuals in understanding tax rules, making complex matters more manageable. Committed to keeping her clients on the right path, she proves to be a valuable ally in any tax-related matter.
