Heffingsvrij

Heffingsvrij is a Dutch term that translates roughly to “tax-free.” It refers to parts of income, wealth, or transactions that are not taxed, or to thresholds below which tax does not apply. The concept is used to reduce the amount of income or wealth that is subject to taxation.

In income tax (box 1) context, the heffingsvrij bedrag or equivalent notion denotes the portion of earnings that remains untaxed because it falls under a tax-free threshold. The remainder of the income is taxed at progressive rates. The exact amount of the tax-free income is determined annually by the government and published by the Belastingdienst and related tax authorities.

In wealth tax (box 3) context, het heffingsvrij vermogen refers to the portion of a taxpayers’ assets that is exempt from box 3 taxation. Only the wealth above this threshold is considered for the deeming yields and the associated tax. This threshold and the calculation method are adjusted periodically and can depend on personal circumstances such as living situation or partnerships.

Beyond income and wealth, the term also appears in other tax-related contexts as a general description of exemptions or allowances intended to prevent taxing very low amounts. The overarching purpose of heffingsvrij measures is to reduce the tax burden on low incomes or limited wealth, aligning tax liability with ability to pay.

See also: Belastingdienst, box 1, box 3, heffingskorting, belastingvrijstelling.