box3heffing

Box3heffing, or Box 3 wealth tax, is a component of the Dutch income tax system that taxes net assets held on 1 January each year. It applies to savings and investments such as bank balances, stocks, bonds, funds, and other non-ownership assets. The value of the primary residence is not included in Box 3; its value is taxed in Box 1. Liabilities related to Box 3 assets reduce the net wealth base.

The calculation starts with net wealth (vermogen) = total assets minus liabilities as of 1 January. From this base, a tax-free allowance (heffingsvrij vermogen) is subtracted. The remaining amount is used to determine a notional yield, determined by a banded scheme with higher assumed returns for higher wealth. The resulting notional yield is then taxed at the Box 3 tax rate. In practice, the Box 3 tax is an annual liability based on this calculation and collected through the income tax return.

Individual allowances apply to singles and couples or fiscal partners. Assets held abroad are typically included in the Box 3 base, while the treatment of specific asset types can vary by rule. The system is administered by the Dutch tax authority, Belastingdienst, and the return is filed annually.

The Box 3 regime has been the subject of ongoing political debate and reform, with changes to the calculation method and thresholds in recent years. Critics argue that the notional yield approach is complex and burdensome for savers, while supporters say it provides a stable method to tax wealth without taxing actual returns.