Income from savings and investments: Box 3

Box 3: savings and investments

Income from savings and investments: Box 3

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 30%.

Calculation:

Assets on 1 January
-/- Debts on 1 January
—————————— =
Net capital
-/- Tax free amount
—————————— =
Tax base * percentage fictitious profit * 30% (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

YearExemption single personExemption fiscal partners
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

Debts

Debts and liabilities will reduce the taxable base but there is a threshold:

YearThreshold without fiscal partnerThreshold with fiscal partner
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 still 30%.

2020

BracketYour (share of)
savings and investments
Percentage
0.07%
Percentage
5.28%
Percentage average
profit
1Up to and including € 72,79867%33%1,789%
2From € 72,798 up to and including € 1,005,57321%79%4.185%
3From € 1,005,5730%100%5.28

How is the fictitious profit calculated?

In bracket 1 a percentage of 0.07% is calculated over 67% of the equity and 5.39% over the remaining 33% of the equity.

In bracket 2 a percentage of 0.07% is calculated over 21% of the equity and 5.28% over the remaining 79% of the equity.

In bracket 3 a percentage of 5.28% is calculated over 100% of the equity.

2019

BracketYour (share of)
savings and investments
Percentage
0.13%
Percentage
5.59%
Percentage average
profit
1Up to and including € 71,65067%33%1,931%
2From € 71,651 up to and including € 989,73621%79%4.443%
3From € 989,7370%100%5.59%

2018

BracketYour (share of)
savings and investments
Percentage
1.63%
Percentage
5.39%
Percentage average
profit
1Up to and including € 70,80067%33%2.017%
2From € 70,801 up to and including € 978,00021%79%4.326%
3From € 978,0010%100%5.38%

2017

BracketYour (share of)
savings and investments
Percentage
1.63%
Percentage
5.39%
Percentage average
profit
1Up to and including € 75,00067%33%2.871%
2From € 75,001 up to and including € 975,00021%79%4.600%
3From € 975,0010%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.

YearExemption single personExemption fiscal partners
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.

FAQ

Bank savings and 30% ruling. Foreign bank accounts. What to declare?

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2 thoughts on “Income from savings and investments: Box 3”

  1. I have been living and working in the Netherlands for over 3 years now. I do not own any properties nor hold any debts. I have a bank account + savings account which totals more than 30,840 euros. I am a bit worried because I don’t remember how much my total savings was exactly on 1 January 2020, it could have been slightly more than 30,840. Probably around 32,000 euros.

    Now, I would like to know how much I am going to be taxed for this next year?

    Also, what would be your recommendation to reduce this in the future?

    1. Arjan Enneman

      Your taxable assets are first reduced with the tax exemption of € 30,846. The difference is then taxed as explained above:

      In bracket 1 (up to and including € 72,798) a percentage of 0.07% is calculated over 67% of the equity and 5.39% over the remaining 33% of the equity. This is average 1.789%.

      This leads to a taxable profit of € 32,000 – € 30,846 = € 1,154 * 1.789% = € 21. Tax rate is 30% which leads to a tax amount of € 6.

      In my opinion you don’t have to take drastic decisions to reduce the tax looking at the small amount. Otherwise the options are mentioned in the article above under Exempted assets.

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