Do you have taxable income that falls under Box 3 in your Dutch tax return? Recent changes in tax regulations may allow you to appeal your calculated income. In this guide from Taxsight, we’ll break down the essential updates and provide an overview of the Dutch tax system.
Who is liable for tax in the Netherlands?
If you are a Dutch resident, understanding your tax obligations is crucial. However, taxation in the Netherlands is not limited to residents. Non-residents may also be subject to Dutch taxes if they own property in the Netherlands or hold shares in a Dutch-registered limited company.
For those liable for Dutch taxes, significant changes have been made to the way Box 3 income is calculated. This article will explain these updates and provide insights into the Dutch tax framework.
The three tax boxes
The Dutch tax system categorizes taxable income into three distinct groups:
- Box 1: Income from employment, self-employment, and certain benefits
- Box 2: Income from a substantial interest (5% or more of shares in a B.V. or similar entity)
- Box 3: Income from savings, investments, and debts not included in Box 1 or 2
Box 1 taxation
Box 1 includes income from employment, self-employment, pensions, unemployment benefits, disability allowances, alimony, and specific financial interests. The tax rates for 2025 are:
| 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% |
Certain personal expenses, such as mortgage interest, medical expenses, and public transport costs exceeding 10 kilometers, can be deducted from taxable income, reducing overall tax liability.
Additional deductible expenses include charitable donations to recognized funds, private pension contributions within limits, premiums paid into private disability insurance, and unreimbursed travel expenses incurred for work, all of which can help reduce your taxable income.
Box 2 taxation
Box 2 taxation applies to individuals with a substantial interest (5% or more) in a company. Taxable income in this category includes dividends and capital gains from share sales. The 2025 tax rates are:
- 24.5% on income up to €67,804
- 31% on income above €67,804
The 30% ruling, which provides tax advantages to expatriates, has undergone regulatory changes affecting Box 2 taxation starting in 2025. Employees with this ruling must now declare Box 2 income, with transitional provisions in place until 2027.
Box 3 taxation: key developments
Box 3 applies to savings, investments, and debts exceeding a certain threshold:
- 2025 exemption threshold: €57,684 (individuals), €115,536 (tax partners)
- Box 3 tax rate (2025): 36%
Court ruling on fictional returns
A 2021 court ruling led to a shift in the taxation method for Box 3, requiring differentiation between savings and investments. Previously, all assets were taxed at the same rate, leading to unfair tax burdens for individuals with primarily savings-based assets.
From 2023 onward, taxation is based strictly on asset type. This change resulted in higher tax bills for individuals with investments, while savers benefited from lower rates. However, the tax system still uses fictional returns rather than actual income, which has led to further legal challenges.
Historically, the assumed return rates have fluctuated. Here’s how they have changed in recent years:
| Year | Savings (%) | Investments (%) | Debts (%) |
| 2023 | 0.92% | 6.17% | 2.46% |
| 2022 | 0.00% | 5.53% | 2.28% |
| 2021 | 0.01% | 5.69% | 2.46% |
Additionally, the ruling from June 2024 determined that if a taxpayer’s actual return is lower than the fictional return, they can file an appeal. This could potentially reduce tax liabilities for those whose investments underperformed.
Can you appeal your Box 3 tax calculation?
If your actual income from investments is lower than the fictional return set by the tax office, you may have grounds to appeal. A Dutch court ruling in June 2024 determined that taxpayers should be taxed based on their actual income if it is lower than the fictional return.
While appealing can be beneficial in cases where there is a substantial difference, it may not always be worth the effort for minor discrepancies. Given the complexities of calculating actual returns—factoring in value changes, asset growth, and different types of income such as dividends and interest—it is advisable to seek professional tax guidance before filing an appeal.
Box 3 and the 30% ruling
Expats benefiting from the 30% ruling can choose to be treated as partial non-residents, meaning they are generally exempt from Box 3 taxation, except for Dutch real estate (excluding primary residences). However, changes introduced in 2024 mean that, starting in 2025, employees with the 30% ruling must declare their assets in Box 3. Transitional measures apply until 2027.
Dutch tax filing deadlines
You are required to file a Dutch tax return if you receive a tax filing notice from the Dutch tax authorities, have taxable income in Boxes 1, 2, or 3 even without a notice, or expect a tax refund, as this ensures compliance with Dutch tax regulations and prevents potential penalties.
Key deadlines:
- Standard personal tax return: May 1
- M-form (for immigration/emigration) or C-form (for non-residents): July 1
- Possible extension: A few extra months upon request
Tax consultants can often secure longer extensions under special agreements with the Dutch tax office.
Additional considerations for taxpayers
If you are considering appealing your Box 3 taxation, it’s crucial to assess your financial records thoroughly. Be prepared to provide evidence supporting your claim, including:
- Detailed investment income statements
- Savings account interest reports
- Property valuation records
Moreover, tax law changes may continue to evolve, so staying updated with the latest legislative amendments is recommended. Consulting with a tax professional ensures compliance while maximizing your financial benefits.
Changes in the 30% ruling and Box 3 implications
The 30% ruling has long been a valuable tax benefit for expatriates working in the Netherlands. However, changes introduced in 2024 have had an impact on how Box 3 income is handled for those under the ruling. Previously, individuals with the 30% ruling could opt to be treated as partial non-residents, meaning they were exempt from Box 3 taxation on foreign savings and investments.
Starting in 2025, those with the 30% ruling must declare their Box 3 assets, unless they fall under the transitional law. Individuals who had the 30% ruling in place in 2023 will continue to benefit from the exemption until 2027. After that, they will be required to report and pay tax on all Box 3 assets, including foreign savings and investments.
This change may significantly affect expatriates who have structured their finances under the assumption that Box 3 taxation would not apply to their foreign assets. Those impacted should evaluate their financial strategies and consider consulting a tax professional to explore potential mitigation strategies.
Filing an appeal: steps to take
If you believe your Box 3 tax assessment is unfair due to the fictional income method, you may appeal. Here are the steps to follow:
- Review your tax assessment – Carefully check the calculations used to determine your Box 3 taxable income. Compare the assumed return rates with your actual returns.
- Gather supporting documents – Collect bank statements, investment records, and other financial documents to prove that your real income was lower than the assumed return.
- Submit a formal objection – File an official appeal with the Dutch tax authorities (Belastingdienst). This must be done within six weeks of receiving your tax assessment.
- Await the response – The tax office will review your appeal and decide whether an adjustment is warranted. If your appeal is denied, you may escalate the matter to a tax court.
Impact on real estate investments
Real estate investments remain an essential component of Box 3 taxation. If you own property in the Netherlands that is not your primary residence, it will be taxed in Box 3. The value of the property is based on the WOZ (Waardering Onroerende Zaken) valuation determined by the municipality.
For tax purposes, the fictional return for real estate investments tends to be higher than for savings. This can lead to a higher effective tax burden compared to those with predominantly savings-based assets. If you own real estate as an investment, it is recommended to check whether your property’s WOZ valuation is accurate and whether appealing the assessed value could lower your tax liability.
Need assistance?
Navigating Dutch taxes can be complex, especially with recent changes in Box 3 regulations. Taxsight’s team has extensive experience in handling local and international tax matters. If you need expert guidance on how these changes impact your tax situation, contact us today at +31 (20) 261 3221 or email info@taxsight.nl.
