Dutch Tax

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 31% (before 2021 it was 30%).

Calculation:

Assets on 1 January
-/- Debts on 1 January
—————————— =
Net capital
-/- Tax free amount
—————————— =
Tax base * percentage fictitious profit * 31% (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
2021€ 60,429€ 120,858
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
2021€ 3,200€ 6,400
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 raised to 31% in 2021. It is a complicated calculation.

2021

BracketYour (share of) savings and investments
(reduced with the tax free amount, see further below)
Percentage
0.03%
Percentage
5.69%
Percentage average
profit
1Up to and including € 50,00067%33%1.898%
2From € 50,000 up to and including € 950,00021%79%4.501%
3From € 950,0000%100%5.69

How is the fictitious profit calculated?

In bracket 1 a percentage of 0.03% is calculated over 67% of the equity and 5.69% over the remaining 33% of the equity.

In bracket 2 a percentage of 0.03% is calculated over 21% of the equity and 5.69% over the remaining 79% of the equity.

In bracket 3 a percentage of 5.69% is calculated over 100% of the equity.

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

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
2021€ 50,000€ 100,000
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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11 Comments

  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. 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.

  2. Is there a minimum lock-in period for green investments needed to have it exempted from Box 3 ? If so, how long ?

    1. There is no minimum lock-in period for green investments, although the provider of the green investments can have certain requirements to prevent that they have to make a lot of costs for a short term investment only. There are anti-abuse measures if you would decide to move money between boxes for a short period. But moving money between normal investments and green investments in box 3 are not treated as abuse.

  3. Hello, I’ve been leaving in the Netherlands for almost 5 years but still have my house in my country of origin, in July 2021 I will also loose my tax ruling benefit, how will my assets be taxed ? Especially with regards of my house abroad

    1. Once you lose the 30% ruling you will be treated as full tax resident and have to declare your world wide savings and investments in your Dutch tax return. In almost all tax treaties the right to tax a property is given to the country in which the property is located. That means you can then claim an exemption again for the same amount in your Dutch tax return to prevent double taxation. So your foreign property should not result in tax to be paid in the Netherlands.

  4. Hi Arjan,

    Not sure if I fully understand the deduction from the debt.
    I borrowed €100.000 from my family for investment in foreign funds. By the end of the year I received €10.000 interest. What is taxable in my case? Thank you!

    1. Taxed is the value of the foreign funds on 1 January of the tax year minus the amount you borrowed corrected with a threshold of € 3,200 (for a single person in 2021) and that result is reduced with the applicable tax free amount. The interest you received is irrelevant just like the interest you paid on the money you borrowed. Taxation is purely based on the value. So if the value of the funds is € 150,000 then the taxable amount is € 150,000 -/- € 96,800 = € 53,200 -/- € 50,000 (for a single person) = € 3,000.

  5. And if the interest from the fund is €35.000 but I spent all of them, no balance left in my account. Would I be taxed for the full amount of the interest?

    1. The interest itself is not taxed but if it is still on your account (or owned in cash) then it is taxed as part of your assets.

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