The Dutch tax return: All you need to know about Box 3 and investments

Do you have taxable income to go into Box 3 of your Dutch return? Make sure you are up to speed with the latest changes on how you can appeal your calculated income with this explainer from Taxsight.

As a Dutch resident, you need to understand what your tax obligations are and how to meet the tax requirements. In fact, it's not only residents that are liable for tax in the Netherlands.  A non-resident may also be taxable in the Netherlands if, for example, they own a property in the Netherlands or have shares in a Dutch registered limited company. 

 For those liable for tax in the Netherlands, there have been important developments with Box 3 calculations that you need to be aware of. This article will discuss these changes, as well as give an overview of the Dutch tax system in general.

Dutch income tax boxes

In the Dutch income tax system, there are three categories of taxable income, each referred to as a "Box" and each having its own rate:

• Box 1: Taxable income from employment / self-employment work
• Box 2: Taxable income from a substantial interest (5 percent or more shares in a B.V. or equivalent company)
• Box 3: Taxable income from savings and investments and debts which are not considered part of Box 1 or 2

Box 1 taxation

In Box 1, you declare your personal income from employment and self-employment. Other taxable income that should be included in this box is:

1. Pension income
2. Income from an unemployment benefit
3. Income from a disability allowance
4. Alimony
5. Income from other activities that do not fall under employment income or business income
6. Interest income received from your own limited company (B.V.)

The Box 1 rates are as follows for 2025:

Brackets	Taxable income	Percentage
1st bracket	up to 38.441 euros	35,82%
2nd bracket	38.441 - 76.817 euros	37,48%
3rd bracket	over 76.817 euros	49,50%

The expenses that can be claimed in your tax return

In your personal tax return, you can also claim some expenses to reduce your taxable income and thereby reduce your tax bill. Some personal expenses that can be deducted are:

1. Mortgage interest and ground lease
2. Donations to certain registered charity funds
3. Certain medical expenses which are not covered by healthcare insurance and not part of your own risk (eigen risico)
4. Travel expenses to work made with public transport (exceeding 10 kilometres) which weren’t fully covered by your employer
5. Alimony paid to your ex-partner

These expenses can only be claimed against the 2nd tax bracket. Therefore, you receive a maximum tax refund of 37,48 percent.

The following items can be claimed against the higher tax rate of 49,50 percent:

1. Premiums paid into an additional private pension. Note that there is a maximum amount that can be deducted in your personal tax return depending on your personal situation.
2. Premiums paid into a private disability insurance (mainly used by self-employed people).

Box 2 taxation

When you hold shares in a legal company, for instance a B.V., this should be declared in Box 2 of the tax return. You should also report any dividends you receive as a Box 2 shareholder.

A taxpayer is regarded as having a substantial interest in a legal entity if they, either alone or together with their partner, hold at least 5 percent of the shares in the legal entity. This interest can be held directly or indirectly.

The value of the shares is not taxed on an annual basis in Box 2. Instead, what is taxed is the income from a substantial interest, which consists of the dividends received on such shares and any profits made from the sale of shares.

The sale of the shares is taxed if they are sold for a higher price than the purchase price or the share capital that was deposited in the company. Both are taxed in Box 2. For 2025, the tax rate is:

• 24,5 percent on amounts up to 67.804 euros
• 31 percent on amounts over 67.804 euros

It does not matter whether a person holds the shares in a Dutch or a foreign limited company. If you hold the minimum percentage of shares in a company, you are considered to have Box 2 shares.

Box 2 and the 30% ruling

The dividend payments received as a substantial shareholder (5 percent or more) in a foreign entity could be exempt from Dutch taxes in Box 2 if a person has the 30% ruling application and is considered a partial non-resident taxpayer. It is required that the company which distributes the dividends is, on the basis of international tax residency rules, considered not to be located in the Netherlands.

Note that the 30% ruling application regulations changed on January 1, 2024. This has had impact on Box 2 taxation. Based on this new legislation, starting 2025, employees with the 30% ruling application should declare this Box 2 income as well.

However, employees who had the 30% ruling application in 2023 already fall under the transitional law. Starting 2027, they should declare the foreign Box 2 income regardless of whether the 30% ruling still applies.

Box 3 taxation

Dutch tax law mandates that residents with investments, savings or property with a value of more than 57.684 euros (2025) must declare these items in Box 3 of their annual personal tax return (Box 3 debts are also included). Tax partners have a double threshold of 115.536 euros. Additionally, the net assets are valued on the reference date of January 1 of the corresponding tax year.

The Box 3 tax rate for 2025 is set at 36 percent and calculated on the fictional return on income. The fictional return of income in Box 3 is set as follows for 2025:

Type of investment	Fictional return of income
Savings	1,44 % (provisional rate)
Investments	5,88%
Debts	2,62%

Court decision on fictional returns

Following a court ruling in December 2021, the government introduced a taxation system for Box 3 based on the type of assets. This is being applied retrospectively, starting from 2017.

The court law was in reaction to the previous system that assumed that assets of any type were considered to be investments, which led to people with mainly savings paying more taxes, due to the fact that the taxation on investments is higher. The court ruled that people should be taxed on the type of assets they hold.

On the other hand, for people who only had investments, it was more beneficial that their assets were partly taxed as savings. Until 2022 It was optional to use the most beneficial tax method. Even if you only had investments in Box 3, it was partly taxed against the rates for savings. That changed from 2023. Because of this, people with investments in Box 3 received a higher tax bill in 2023 than the previous years.

The taxation on savings is now lower than for other investments. The tax office uses the following fictional income rates:

	2024	2023	2022	2021	2020	2019	2018	2017
Savings	1,03%	0,92%	0,00%	0,01%	0,04%	0,08%	0,12%	0,25%
Investments	6,04%	6,17%	5,53%	5,69%	5,28%	5,59%	5,38%	5,39%
Debts	2,47%	2,46%	2,28%	2,46%	2,74%	3,00%	3,20%	3,43%

However, taxes are still based on fictional income. If your actual income from Box 3 is lower than the fictional income, you may have grounds for an appeal.

Developments for Box 3

Box 3 taxation was always based on the value of your assets. The ongoing discussion revolves around whether taxes should be calculated based on actual income from investments, rather than the new fictional rates. Some taxpayers have claimed that their actual income is lower than the fictional method suggests.

The Dutch Court recently (June 2024) ruled that in such cases, the tax office should use the actual income if it is lower than the fictional return. In certain situations, it may take some calculations to determine the actual return for a specific year.

You now have the option to appeal if you received less income from your assets than the calculated fictional income. It is not necessary that you got a negative return, only that the return is less than the fictional income. This means that if your income was less than the fictional income, you can potentially appeal the tax assessment and request that the actual income method be used.

Note that the difference can be very limited in some situations. For example, if you have a fictional income of 10.000 euros, while your actual income was 9.500 euros, the income difference is only 500 euros, which equates to just 180 euros less taxation from Box 3. The question is then whether it is worth the effort to appeal.

In the context of the Box 3 discussion, it's important to note that the calculations can be quite complex due to different types of value increases, asset growth and income from assets such as interest and dividends. Given these complexities, in most cases it is not not fully clear upfront whether there will be any financial benefit to using actual income. It can be a challenge to determine which investments earned a lesser return.

Box 3 and the 30% ruling

If a resident has been granted the 30% ruling, they can opt to be treated as a partial non-resident taxpayer. A partial non-resident taxpayer - along with their tax partner - does not have to declare or pay tax on savings and investments in Box 3. The only exception is Dutch real estate that is not considered your primary residence. This real estate should be declared in Box 3 of your personal income tax return.

Note that the regulations on the 30% ruling application changed in 2024 regarding Box 3 as well. Starting 2025, employees with the 30% ruling application should declare their assets. However, employees who had the 30% ruling application in 2023 already fall under the transitional law. Starting 2027, they should declare their assets regardless of whether the 30% ruling still applies.

When do you need to file a Dutch tax return?

The Dutch tax return needs to be filed:

1. If you received a letter from the Dutch tax authorities (Belastingdienst) with a filing obligation.
2. If you didn’t receive a letter, but you have something to declare that leads to taxes in Boxes 1, 2 or 3.
3. If you expect a refund, regardless of whether you received a letter from the tax office.

The tax return can be filed up to five years later.

The deadline to file your taxes

The filing deadline for the personal tax return is May 1. If the tax return concerns a so-called M-form for immigration or emigration, or a C-form for non-resident taxpayers, then the filing deadline is July 1. The filing deadline can also be set later by the tax office if the letter is issued at a later stage. It is possible to apply for a filing extension of a few months if you can’t make the deadline.

Please note that if you work with a tax consultant, they can get you a longer filing extension due to the filing extension ruling with the tax office.

Help is out there

That is a lot to take in! Filing Dutch taxes doesn't have to be complicated, but it can feel complex, especially if you have different types of savings and investments. Using a reputable tax consultant can help take the pressure off and give you the certainty that you aren't over or underpaying your taxes.

Do you need help understanding how the new Box 3 rules affect you and your taxes? Taxsight has many years of experience in helping their clients with local and international tax matters. Contact their team by calling +31 (20) 261 3221 or emailing info@taxsight.nl.