Taxation of assets (box 3) renewed, again

Broadstreet - News - - Taxation of assets (box 3) renewed, again

September 17th, 2019

The taxation of Dutch held assets will be renewed, again. On 6 September 2019 the State Secretary announced the intent to change the way assets are taxed in the Netherlands. Even though changes have already been made to the regime in 2018, there was still a sense of injustice amongst people whose assets solely consisted of savings. The main issue is of course a very low interest rate, which leads to a relatively heavy tax burden on the return on investment. 

So, what are these proposed changes and how will they affect your assets in the near future? In short, positively if your assets solely consist of savings and negatively if they consist of investments. Currently, net assets (assets minus debt) above the threshold of € 30,846 (2020) are taxed in box 3 against a progressive tax rate structure. The proposal suggests dividing box 3 into three sections: (a) savings, (b) other assets and (c) debts. On each of these sections an individual flat-rate will be calculated. For assets under the € 30,846 threshold no taxes will be levied, but (in contrast to the current regime) if the assets surpass the threshold the entirety of the assets will be taxed. 

The proposed flat-rate return for savings of 0,09% is drastically lower than the flat-rate investment return for other assets of 5,33%. A flat-rate debit interest for debts which is based on the average mortgage interest of 3,03% will be taken into consideration. Subsequently, tax payable in box 3 will be calculated as follows: 

(savings x 0,09% + other assets x 5,33%) -/- (debts x 3,03%) = income in box 3

Income in box 3 -/- tax-free income threshold = taxable income in box 3

Taxable income in box 3 x 33% = tax payable in box 3

With assets now separated in different categories in box 3 the State Secretary noted that it is expected that tax payers will be tempted to abuse this new regime to their benefit and annually convert all their assets into savings around the calendar date.  In order to prevent this, discouraging measures proposed as ‘anti-arbitrage measures’ will be introduced. It is expected that the tax proposal for the new box 3 – regime will be presented before the summer of 2020 and will take effect as of 1 January 2022. 

Contact

Would you like to get further insight into how these possible changes may affect your savings and investments? Please contact rhoda@broadstreet.nl or any of our other tax lawyers by calling + 31 (0)20 262 4300

Daniel Sokolov
Daniel Sokolov
14:41 06 Dec 18
Thank you Broadstreet!!!first I have to say that my knowledge in taxes is 0%.I'm checked a lot before I find a Broadstreet team and I'm really glad.they are professional helpful and helped me step by step with everything what I ask for.Thanks again to everyone
Dehlia Kruger
Dehlia Kruger
14:08 01 Sep 18
We are extremely happy and satisfied with the service we received from Broadstreet, Elisabeth Bouwer in particular. Financial information was accurate to the cent, and every promise given was kept. Highly recommended!
Susie Breuer
Susie Breuer
15:33 30 Aug 18
I have used Broadstreet for around 10 years for tax purposes within Holland. I found them knowledgable, responsive and very professional. I would highly recommend them as an expat tax service.
Benedict Carey
Benedict Carey
13:43 06 Nov 17
Having been bounced around a few tax advisors and almost got my self in hot water by being told the wrong thing, I got a recommendation from another person who had a similar business structure to me. The Broadstreet advisor was efficient and thorough and provided a comprehensive and understandable summary of how to deal with my situation. Relocating between regimes with complex tax laws is never going to be straightforward, at least these guys do put the effort in ... beware of others who will make a suggestion and then disappear when it goes haywire!
marco lirio diaz
marco lirio diaz
09:41 24 Jun 17
Great services,thorough and real professionals. As an expat I highly recommend Broadstreet. I had some issues with my tax and they manage to solved the problem avoiding a penalty fee. If you don't want to worry about the complex Dutch Tax, I recommend to leave it on their hands to be sort it for you.
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