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 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);
  • (till 1 January 2013 social,cultural or ethical investments and direct or indirect investments in starting companies up to a certain amount)

Exemption for green investments

YearExemption single personExemption fiscal partners
2019€ 58,540€ 117,080
2018€ 57,845€ 115,690
2017€ 57,385€ 114,770
2016€ 57,213€ 114,426
2015€ 56,928€ 113,856

FAQ

Debts

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

YearThreshold without fiscal partnerThreshold with fiscal partner
2019
2018
2017€ 3,000€ 6,000
2016€ 3,000€ 6,000
2015€ 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. As of 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%.

2019

Bracket
Your (share of)
savings and investments
Percentage
1.63%
Percentage
5.39%
Percentage average
profit
1Up to and including € 71,65067%33%1,935%
2From € 71,651 up to and including € 989,73621%79%4.451%
3From € 989,7370%100%5.60%

How is the fictitious profit calculated?

In bracket 1 a percentage of 1.63% is calculated over 67% of the equity and 5.39% over the remaining 33% of the equity.

In bracket 2 a percentage of 1.63% is calculated over 21% of the equity and 5.39% over the remaining 79% of the equity.

In bracket 3 a percentage of 5.39% is calculated over 100% of the equity.

2018

Bracket
Your (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

Bracket
Your (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
2019€ 30,360€ 60,720
2018€ 30,000€ 60,000
2017€ 25,000€ 50,000
2016€ 24,437€ 48,874
2015€ 21,330€ 42,660

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).

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?