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Box 3: income from savings and investments

Last modified: 29 January 2017

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

Taxable assets


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. A part of the assets is taxed based on a fictitious profit of 1.63% and a part (or all the assets if you fall in the 3rd bracket) are taxed based on a fictitious profit of 5.39%. The tax rate is still 30%.

Bracket Your (share of) savings and investments Percentage 1.63% Percentage 5.39%
1 Up to € 75.000  67% 33%
2 From € 75.000 to € 975.000 21% 79%
3 From € 975.000 0% 100%

Taxable 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.
FAQ

Debts

There is a threshold for liabilities:

Year   Threshold without fiscal partner   Threshold with fiscal partner
2017   € 3,000   € 6,000
2016   € 3,000   € 6,000
2015   € 3,000   € 6,000
2014   € 2,900   € 5,800
2013   € 2,900   € 5,800

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.

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

Year   Exemption single person   Exemption fiscal partners
2017   € 57,385   € 114,770
2016   € 57,213   € 114,426
2015   € 56,928   € 113,856
2014   € 56,420   € 112,840
2013   € 56,420   € 112,840

FAQ

  • Are certain assets exempted from taxation in Box 3?

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?

Tax free capital - 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.

Year   Exemption single person   Exemption fiscal partners
2017   € 25,000   € 50,000
2016   € 24,437   € 48,874
2015   € 21,330   € 42,660
2014   € 21,139   € 42,278
2013   € 21,139   € 42,278

Calculator

Click on the "Calculate Your Taxes" button on the right to calculate the box 3 tax.


Page 2

The 30% ruling is a tax advantage for incoming employees who are working in the Netherlands. When the appropriate requirements are met, the employer is allowed to grant a tax free allowance amounting to 30 percent of the salary which is subject to Dutch payroll tax. Consequence is that the taxable part of the salary is reduced to 70% and on top of that the 30% allowance is paid so that the total stays 100%. The tax free allowance is considered as compensation for extra territorial expenses a foreign employee has for working outside their home country.

Expatax can assist with the whole application procedure. We are very experienced with the 30% ruling and the application and have many companies as our client for which we take care of all the requests for their employees. In the last 10 years we have filed thousands of applications with a high success rate. Our fees are mentioned on our fee schedule.

Due to our proven expertise the tax authorities have granted us the right to check the 30% ruling applications on their behalf. This way the procedure will take less time.


The employer can reimburse the extra territorial costs of the employee tax free. To be able to do this the employee must hand over all the receipts and the employer must check and approve them. This can lead to a lot of work, especially if more employees are in a similar situation. To make it easier employer and employee can request the tax office (foreign tax office in Heerlen) to grant the 30% ruling to the employee for his activities for the employer. This way the employer can, once granted, pay out a tax free allowance of (roughly said) 30 percent of the salary of the employee. The 30% allowance will be included in the salary in such way that the costs for the employer will not be higher, while the employee has a higher net salary. The allowance will therefore not be paid on top of the earlier agreed gross salary. If a net salary agreement was made then the benefit will go to the employer.

For more information and answers to frequently asked questions see also our Knowledge Base.




Category: Savings

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