Box 3 relief measures dropped over budget constraints

In addition, the Tax Incentives for Startups and Scale-ups Bill (Wet fiscale stimulering startups en scale-ups), submitted on Budget Day, contains a broader definition of startups and scale-ups. That definition would also be relevant to the new box 3 system. Under the WWR bill, shares and profit-sharing certificates in these young businesses would, by way of exception, be subject to capital gains tax, as would immovable property. Read more about the new definition in our Tax News item.

The most controversial aspects of the WWR bill remain unchanged for the time being. The mitigating measures requested by both Houses, including loss carry-back, have not been incorporated into legislation because no funding has been identified for them.

Until a new system enters into force, the current flat-rate (deemed-return) system for box 3 will continue to apply. Under the Box 3 Counterevidence Scheme Act (Wet tegenbewijsregeling box 3), taxpayers may continue, during the intervening years, to demonstrate that their actual return is lower than the deemed return.

Because the Senate has deferred its vote on the WWR bill, the planned commencement date of 1 January 2028 is also at risk. Taxpayers should therefore be prepared for the current system to remain in force for longer than previously expected.

The sections below explain the background to the new box 3 system, the relationship between the WWR bill and the amending bill, why the amending bill has been postponed, and the proposed transition to a full capital gains tax. 

The reform of box 3 has its origins in the Supreme Court’s Christmas Judgement of 24 December 2021. In that judgement, the Supreme Court held that the flat-rate box 3 system, under which tax is levied on a deemed return, was contrary to the European Convention on Human Rights (ECHR). A series of legal-redress and bridging measures followed while the government worked on a permanent system based on actual returns. That system took shape in the Bill on Actual Returns in Box 3 (Wet werkelijk rendement box 3, WWR).

At the heart of the new box 3 system is a tax on actual returns from savings and investments. Under the general rule, an asset accumulation tax would be levied annually on direct income, such as interest, dividends and rent, as well as on changes in asset values, including unrealised gains. As an exception, immovable property and shares and profit-sharing certificates in startups and scale-ups would be subject to capital gains tax. Tax would then be levied only upon realisation, such as a sale, on the difference between the acquisition price and the sale proceeds.

During the parliamentary debate, the original bill attracted substantial criticism, particularly because of the asset accumulation tax and the absence of certain mitigating measures. Given the limited time available to introduce the new system in 2028, the House of Representatives nevertheless passed the bill. Both Houses subsequently adopted motions calling for mitigating measures, including loss carry-back, and for the system to be developed further towards a capital gains tax. The latter objective was also included in the Coalition Agreement. Read more in our Tax News item: Coalition Agreement 2026: an overview of the tax measures.

In response to the criticism, the State Secretary outlined several possible changes and their budgetary implications in an annex to his letter of 19 June 2026 to the Senate. Those changes could have been included in an amending bill. An amending bill (novelle) is a separate bill that modifies a bill already introduced or passed, allowing the Senate to vote on the original bill and the proposed changes as a single package.

The government had identified the following possible mitigating measures: loss carry-back; rollover relief on marriage and divorce; retention of tax incentives for green investments; changes to the tax rate and the tax-free allowance; relief for inherited or gifted estates qualifying under the Nature Conservation Act (NSW); reinstatement of the option to elect for partial non-resident taxpayer status; and the introduction of a so-called win-win loan.

Under the budgetary rules, the loss of revenue resulting from the measures in the amending bill must be offset. No agreement was reached on the necessary funding during the budget negotiations. In the absence of a broadly supported funding proposal, the government decided not to submit the amending bill. The government will now use the coming period to seek a solution in the 2027 Spring Memorandum (Voorjaarsnota 2027).

On 12 February 2026, the House of Representatives passed the Bill on Actual Returns in Box 3 despite the criticism raised. The bill has since been pending before the Senate. The Senate deferred its vote while awaiting an amending bill, so that it could vote once on the complete package: the original bill together with the proposed changes. As the amending bill will not be submitted for the time being, the Senate is expected to continue to defer consideration of the WWR bill.

The route towards a full capital gains tax in box 3 is currently unclear. In the Coalition Agreement, the government stated its ambition to convert the box 3 system into a capital gains tax for all assets. This is consistent with motions previously adopted by the House of Representatives.

The government is therefore aiming for a system under which all box 3 assets are taxed only upon realisation. For savings, listed securities and other assets, tax would no longer be levied annually on unrealised increases in value, but only on capital gains actually realised, for example upon a sale.

The State Secretary had undertaken to explain on Budget Day what the next steps for the government’s plans would look like. However, the government was unable to reach agreement during the budget negotiations.

Which budgetary scenarios is the State Secretary considering?

The State Secretary is considering the following budgetary scenarios:

1. Introduction of the WWR in 2028, together with an amending bill containing improvements.

1. Introduction of the WWR in 2028 and introduction of a full capital gains tax in 2030.

1. No introduction of the WWR, but introduction of a full capital gains tax in 2030.

1. Introduction of the WWR in 2028, extension of the current capital gains tax exception to all financial instruments in 2028, and introduction of a full capital gains tax in 2030.

If the bill is amended, the Dutch Tax and Customs Administration and financial institutions will have very little time to implement the changes by 1 January 2028, as their systems have so far been designed for an asset accumulation tax. They require at least 18 months from the date on which the bill is passed and the IT specifications are finalised. Entry into force may therefore not be feasible before 2029. Each year of delay to the new box 3 system costs the Dutch treasury EUR 2.4 billion because the changes made since the Christmas Judgement have reduced tax revenues. Banks also have concerns about making yet another change to their systems. A tax on actual returns in the form of a capital gains tax would require them to provide substantially more data than an asset accumulation tax, increasing the risk of errors and requiring additional staff and significant implementation expenditure. The required data include historical prices, sale proceeds, associated costs and dividends received. The change would also place greater demands on the Dutch Tax and Customs Administration, as the higher risk of errors would require more extensive checks and additional staff.

On 8 September, the House of Representatives adopted a motion asking the government to split the WWR bill and submit the capital gains tax rules for immovable property as a separate bill. This could allow capital gains taxation of immovable property to be introduced sooner. Even then, however, the absence of funding would remain the main obstacle.

The new definition centres on a business that aims for rapid growth through a scalable and repeatable business model based on innovation. The Netherlands Enterprise Agency (RVO) assesses whether these criteria are met upon application. Under the proposed system, shares and profit-sharing certificates in startups and scale-ups would be subject to capital gains tax.

The definition of young businesses in the original bill did not adequately reflect the characteristics of startups and scale-ups. The Tax Incentives for Startups and Scale-ups Bill replaces it with a broader, more practical definition. That definition will become relevant to box 3 only if the Bill on Actual Returns in Box 3 is passed.

The coming months will be decisive for the final design of the new box 3 system:

• Entry into force: the planned commencement date of 1 January 2028 is at risk. The government has asked the Senate to defer consideration of the bill for the time being. The government will use the coming period to seek solutions in the 2027 Spring Memorandum (Voorjaarsnota 2027).
• Startups and scale-ups: on Budget Day, the government submitted the separate Tax Incentives for Startups and Scale-ups Bill to the House of Representatives. The new definition in that bill would also apply under the new box 3 system.
• Further development towards a capital gains tax: the government intends to develop the new box 3 system into a full capital gains tax for all assets. The route towards a full capital gains tax in box 3 is not yet concrete. According to the State Secretary, full development towards a capital gains tax could be possible by 2030 under an ambitious legislative timetable.

All of this shows that the new box 3 system is not yet settled. Hopefully, clarity will soon be provided for box 3 taxpayers.