June 21st, 2023
The Dutch Wealth tax, sometimes known as Box 3 tax, or, in Dutch, the “Vermogensrendementsheffing”, is a form of taxation in the Netherlands that is levied against the assets or wealth of individuals.
The Dutch system uses the concept of ‘assumed yield’ based on estimates of profit and interest from different types of wealth and assets. What this means is that the amount you actually owe under the Dutch Wealth Tax is based on an ‘assumed yield’ from your wealth and assets, not the actual income generated. Fear not, the Netherlands publishes the assumed yield amounts for different types of assets each year.
| Box 3 income rates of return | ||||||
|---|---|---|---|---|---|---|
| Type of asset | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 |
| Savings | 0.00% | 0.01% | 0.04% | 0.08% | 0.12% | 0.25% |
| Investments/other assets | 5.53% | 5.69% | 5.28% | 5.59% | 5.38% | 5.39% |
| Debts | 2.28% | 2.46% | 2.74% | 3.00% | 3.20% | 3.43% |
In Box 3, individuals are required to report their net assets, which include savings, investments, and any real estate (excluding your main residence) investments in a second home, and other assets.
The Wealth Tax in 2023: What’s New?
There were some changes to the wealth tax in 2023, such as the increase of the exemption to EUR 57,000. More tax will need to be paid on larger amounts and the wealth tax rate will be increased annually, up to 34% in 2025.
In 2023, it sits at 32%.
These are the “assumed yield” rates of return for 2023:
- bank balances, savings and cash: 0.36%
- investments/other assets: 6.17%
- debts: 2.57%
How does this work in practice?
As the current wealth tax rate in 2023 is 32%, would this require a payment of 32% of 6.17% on, say, an Exchange Traded Fund (ETF)?
If that ETF was worth EUR 200,000, you would first apply a EUR 57,000 tax exemption leaving EUR 143,000 taxable total. The 2023 assumed yield for investments is 6.17%. So, 6.17% of EUR 143,000 is EUR 8,823. Then, the wealth tax rate of 32% is applied to that amount.
Conclusion? That leaves EUR 2,823 (32% of 8.823) tax owed on an ETF of 200,000.
Note: In the Netherlands the value of shares is considered as it is on the 1st January every year.
This is a simplified overview. Always consult with a qualified tax professional for the latest information on Box 3 tax or any other tax matters in the Netherlands.
