Box 3 and individuals

Box 3 in the years up to and including 2016

As early as 2019, the Dutch Supreme Court questioned the flat-rate (deemed-return) levy in Box 3. That case concerned the years 2013 and 2014, but ultimately it related to the Box 3 regime that applied up to and including 2016. At the time, the Dutch Supreme Court ruled that on a systematic level, the fundamental freedoms as included in the European Convention on Human Rights may have been violated. However, the Dutch Supreme Court only wanted to intervene if there would be an excessive burden on the individual. This is because the legislator has a wide margin of appreciation for the design of taxes and the Dutch Supreme Court found that the tax legislation at that time still remained within these limits.

Therefore, according to the State Secretary, there is no need for financial compensation for those years. However, the last word has not yet been said regarding the mass objection procedure for the years 2013 and 2014 (this procedure will continue for the years up to and including 2016). This is because the case is still pending before the European Court of Human Rights (ECHR). If the ECHR rules that a violation of the right to property took place in the years 2013 and 2014 at its core and grants financial compensation for those years to the petitioners, it is likely that those who are covered by the mass objection procedure from 2013 and 2014 will also receive compensation. The State Secretary has previously indicated that no legal redress will be offered for these years unless the ECHR rules otherwise. The Cabinet will then follow the judgement of the ECHR in this respect.

Therefore, there is still a possibility for financial compensation based on the judgement of the ECHR for the years 2013 and 2014 if you were part of the mass objection procedure. Of course, we will keep you informed about these developments.

Box 3 for the years 2017 up to and including 2022

As of 2017, the Box 3 taxation system made use of an imputed notional return based on an assumption of the composition of your assets. This means that two return classes served as the starting point: bank deposits and investments. The higher the combined value of your assets, the more it was assumed that you would have invested part of it. Of course, this need not be the case on an individual level. 

The fact that the individual mix of assets is not considered is in fact the reason for the Dutch Supreme Court's opinion that the current Box 3 system infringes on the fundamental rights of taxpayers in such a way that it is untenable. This is because the current design of the system based on deemed returns does not adequately reflect the actual returns achieved on an individual level. The assumed asset mix leads to an unfair treatment of particularly individuals whose assets consist primarily of savings accounts, given the low actual return for this group.

Specifically, the system violates the right to property and the prohibition on discrimination of the European Convention on Human Rights, in cases where the actual return achieved is lower than the calculated fictitious return. If this is the case for you, then the Dutch Supreme Court is of the opinion that, because the system of taxation on deemed returns is so misaligned with reality, the government must offer you legal redress. This legal redress must take place on the basis of the actual return. In fact, this means that if your assets in the years 2017 to 2022 consisted mainly of bank deposits, there is a good chance that you will be eligible for legal redress. You can read more about the legal redress and which conditions apply below.

Box 3 in the years 2021 and 2022

For the years 2021 and 2022, the current Box 3 regime still applies in principle. However, given the perceived discrimination of this system for the 2017 tax year, you will be eligible for legal redress in certain cases, for these years as well. Temporary legislation has been introduced as of 2023, after which the government will introduce a new Box 3 regime in 2028.  

Legal redress for Box 3 levy in 2017 through 2022

Based on the Dutch Supreme Court ruling, the government must provide legal redress to taxpayers who have been disadvantaged. How the redress should be implemented was initially laid down in law, as part of the 2023 Tax Plan package, in the Box 3 Redress Act. However, according to the Dutch Supreme Court, the redress as envisaged by the legislature also does not meet the required legal standards. In its judgements of 6 June 2024, the Supreme Court determined what that redress should look like. This additional redress has been laid down in the Box 3 Counterevidence Scheme Act, which entered into force on 19 July 2025. Below, we explain how the redress process works, who is covered, and how you, as a (potential) entitled person, can obtain redress.

Fixed-rate savings variant as basis for legal redress 

For the years 2017 through 2022, the Cabinet has decided to offer - at least three groups of taxpayers - automatic legal redress based on a new flat-rate calculation method that according to the Dutch Cabinet approximates the actual return as closely as possible (please refer to ‘For whom?’ below for further information regarding the three groups of taxpayers). This has been done for practical reasons, in order to be sufficiently in line with reality but also to keep the legal redress practicable. According to the Supreme Court the lump-sum calculation method is also insufficient from the perspective of legal redress in certain cases. However, if the method devised by the Supreme Court for these situations was more unfavourable than the legislator's lump-sum calculation method, you are entitled to apply to the more favourable of the two. Thus, the lump-sum calculation method remains relevant.

The calculation under the flat-rate savings variant is in line with the actual distribution of three categories of assets:

1. The first category of assets regards bank deposits (incl. cash), considering the value thereof at the start of the calendar year (the ‘reference date’). This includes both domestic and foreign deposits.
2. The second category of assets regards all other assets the taxpayer had on the reference date. This includes investments, receivables, other immovable property, endowment insurance, rights to regular payments and other assets that are not bank deposits.
3. The third category of assets regards debts the taxpayer had on the reference date. Note that debts only are considered above a certain threshold (3.000 euros in 2017; 3.100 euros in 2018, 2019, 2020; 3.200 euros in 2021 and 2022). 

The return on the three asset categories is determined by multiplying the value of the assets in a category by the corresponding fixed deemed returns in the following table:

* The flat-rate return on category 1 is based on the average of the monthly interest rates on deposits of households redeemable at notice of up to three months, as published by De Nederlandsche Bank, over a period of eleven months, with the percentage for the month of November counting double.
** The flat-rate return on category 2 is the deemed return as was applicable in the relevant year for asset category II of Box 3.
*** The flat-rate return on category 3 is based on the average of the monthly interest rates on the total outstanding amount of household mortgages, as published by De Nederlandsche Bank, over a period of eleven months, with the percentage for the month of November counting double.

The returns in asset categories 1 and 2 are added and then reduced by the return in asset category 3. If the calculation on the return leads to a negative amount, the return will be deemed nil. To calculate the new benefit from savings and investments, the rate of return is first calculated by dividing the new flat-rate return by the basis of return and then the calculated rate of return is multiplied by the basis of savings and investments.

If your newly calculated benefit from savings and investments is lower than the originally calculated benefit from savings and investments, your income in Box 3 will be reduced.

You have already reported your bank deposits and other assets and liabilities in your tax return. This is different if you have received an extension for the tax return. You can use the box 3 calculation tool of the Dutch Tax Authorities, which shows whether the new or the old calculation method is the most favourable for you.

Partner allocation

Under the legal redress, the situation may arise that due to recalculation of the aggregate income, more expenses for specific healthcare costs or tax-deductible gifts become deductible. When granting the legal redress, the additional portion of deductible expenses will follow the existing allocation of healthcare expenses and tax-deductible gifts as reported by the tax partners in the tax return.

For whom?

At least the following groups of taxpayers will receive the legal redress:

1. Taxpayers who have filed a timely objection to their income tax assessment for the respective tax year and are part of the mass appeal for the years 2017-2020;
2. Taxpayers who have not filed an objection, but whose assessments for the years 2017-2020 had not yet been irrevocably determined on 24 December 2021; or whose assessments were determined after 24 December 2021 and was finalized before the entry into force of the Policy Decree on Box 3 Redress (1 July 2022), without taking the Christmas Judgement into account; and
3. All taxpayers for the years 2021-2022.

Please note that these groups of taxpayers will only receive legal redress only if the newly calculated return from savings and investments (actual return) is indeed lower than the (previously) calculated return based on the current law (flat rate).

Non-objectors: late or no objection raised

Have one or more of your assessments become irrevocably fixed for the years 2017 through 2020? Then, in principle, you are too late to object. In such a situation, the only option open to you is to submit a request for an 'ex officio’ reduction. However, the Dutch Supreme Court ruled on 20 May 2022 that anyone who objects too late (by means of a request for ex officio reduction) is not entitled to legal redress based on the statutory regulation.

Through a separate letter, it was announced on Budget Day 2022 that the government will not offer legal redress to non-objectors. Ex officio requests will therefore be rejected. The main reason for this is of a budgetary nature. The government gives priority to supporting the purchasing power of citizens and businesses. This means that if you did not object or objected late, you will only get legal redress if the Court eventually decides that you would be entitled to it based on an ex officio reduction request. Because many ex officio reduction requests have been filed and more are expected, it was decided on 4 November 2022 to launch a so-called 'mass objection plus' procedure in which all non-objectors will automatically participate. Should these procedures result in legal redress for non-objectors, the Dutch Tax Authorities will grant these rights to all Box 3 taxpayers. Incidentally, the Secretary of State considers this procedure to have little chance of success.

It is possible that the procedure could eventually end up before the European Court of Human Rights (ECHR) as well. A side note in that case is that a ruling of the ECHR is not covered by the 'mass objection plus' procedure. Therefore, for a very small and specific group of taxpayers with substantial investments, where the actual income is significantly lower than the determined flat-rate income in Box 3, it seems sensible to still file an ex officio reduction request independently. Please note that you can submit an ex officio reduction request up to five years after the end of the tax year. For example, for the 2020 tax year, an ex officio reduction request can be submitted up to 31 December 2025.

Only legal redress for fiscal partner who filed an objection

If only one of the fiscal partners filed an objection, only that partner will get legal redress. Despite the fiscal partnership, both partners are individually taxable, and an assessment is subsequently imposed on both partners individually. It follows from the systematics of the legislation that an objection must be filed per assessment.

PwC has developed a calculation tool (in Dutch) that allows you to calculate your Box 3 income using the flat-rate savings variant. In the results, you can see which calculation method is most favourable for you. 

How do you claim the legal redress and by when?

In principle, the legal redress takes place as follows:

1. You will automatically receive legal redress if you are among the mass objectors
2. You will automatically receive legal redress if your tax assessment has not yet been finalised for the years 2017 up to and including 2020. This will take place in phases starting in mid-September 2022
3. You will also be entitled to a legal redress for the tax years 2021 and 2022. You do not need to take any specific action for this. 

In short, in the above cases, no action is required from you.

In case you are part of one of the categories of taxpayers who may receive legal redress and your income tax return for the calendar year was already determined, while under the new method of calculation the return on your assets would be lower, then the tax inspector will reduce the assessment by the difference. You do not have to file a request for this. If the calculated new return is higher, the assessment will not be adjusted. You will receive a decision from the inspector if this is applicable to you. 

If an assessment for the calendar year has not yet been determined and the calculated new return is lower than the deemed flat-rate return under the current law, then the assessment will include the new return. The assessment will be based on the deemed return under the current law in case the newly flat-rate calculated return is higher.

Should you expect a refund for the 2021 tax year, please be aware that an automatic provisional assessment will be imposed on you based on the current Box 3 system. The new interpretation of the law will only be incorporated into the final assessment. 

A new version of the online tax return programme is available on the Tax and Customs Administration's website, which will take the new system into account for 2021 and 2022. You may also revise your tax return. If you are expecting a refund, it may therefore be worthwhile to re-submit your tax return later in the year. 

Disagree with the (refused) legal redress?

If you do not agree with the (refused) legal redress, you can take the following actions depending on which group of taxpayers you are part of: 

Group 1: Mass appeal

If you do not agree with the decision to reduce your income tax assessment or the decision to refuse legal redress, you can submit a request for an ex officio reduction of the income tax assessment.

Group 2: Not part of the mass appeal and the income tax assessment for the years 2017-2020 have not yet been irrevocably determined.

If, at the time the Decree of 1 July 2022 entered into force, you could no longer lodge an objection, then you can submit a request for an ex officio reduction.

Group 3: Taxpayers for the calendar years 2021 and 2022

You can file an objection with the tax inspector within six weeks after the definite date of the income tax assessment. You may also submit a request for an ex officio reduction.

The request for ex officio reduction must be submitted within five years after the end of the calendar year to which the request relates. Case law established after the assessment became final does not lead to an ex officio reduction, unless the State Secretary for Finance decides otherwise. Therefore, the Inspector will reject a request (for legal redress) from a taxpayer who has not timely filed an objection against the income tax assessment. You can object to this rejection and file an appeal.

Foreign assets and debts

For domestic taxpayers with foreign assets and debts, the system for avoiding double taxation does not fully align with the redress for Box 3. This is because a different return percentage is used. Technically, it works as follows: under the Decree on Avoidance of Double Taxation 2001 (Bvdb), an average deemed return percentage is effectively allocated to foreign assets, whereas the Box 3 Redress Decree uses a return percentage that is composed based on the actual asset mix.

To prevent this, a decree provides that, when applying the statutory redress, one may deviate from the Bvdb. For calculating the double tax relief, the same return percentage may be used as is used to calculate the income from savings and investments. Technically, this is structured as follow:

1. The relief fraction is multiplied by the tax due on the taxable income from savings and investments after applying the Box 3 Redress Decree.
2. The deemed return on the foreign yield base is understood to mean: the return on foreign assets minus the return on foreign debts.
3. The denominator income is determined as: the taxable income from savings and investments after applying the Box 3 Redress Decree.

Taxpayers for whom this arrangement applies will be notified by the tax inspector.

Acquiring new investments via a StAK

The State Secretary has answered various parliamentary questions about acquiring new investments through a Trust Office Foundation (Stichting Administratiekantoor, StAK). He confirms that when acquiring new investments via a StAK, the certificates issued to the property investor are included in Box 3 under other assets at net value (value minus debt). For the same property portfolio held directly in Box 3 outside a StAK, the value counts as another asset with a high deemed‑return percentage, while any associated debt falls into a different Box 3 category with a lower deduction percentage. This is because a certificate represents an interest in the whole (asset and debt), whereas without a StAK the property and the debt are treated as separate assets.

The conclusion is that, with the same property portfolio (both assets and debts), Box 3 taxation can turn out significantly lower when structured through a StAK. According to the State Secretary, however, a StAK is not intended for structures aimed solely at obtaining a tax advantage. The aim is that taxpayers with the same asset composition should be taxed the same. For that reason, it will be examined whether this StAK structure occurs more frequently and how best to counter it, whether or not through a legislative amendment.

Actual return according to the Dutch Supreme Court

In its judgement of 6 June 2024, the Dutch Supreme Court held that the redress under the Box 3 Redress Act is insufficient. Subsequently, the Supreme Court determined how legal recovery should take place in those cases, namely based on the actual return. The following principles apply here:

• Actual return includes not only regular benefits from assets (such as interest, dividends and rent) but also changes in the value of those assets.
• This includes positive and negative as well as unrealised changes in value.
• Interest on Box 3 debt is deductible, but other expenses are not. 
• It concerns the nominal return, so no inflation correction takes place.
• Positive or negative returns in other years are not considered (no 'loss set-off').
• Levy-free assets are not considered to determine whether levying on the basis of actual returns is more advantageous than the Legal Redress Act or 'ordinary' Box 3 legislation.

Furthermore, on 14 June 2024, the Dutch Supreme Court ruled that the statutory provisions must be followed when valuing assets. The main rule is fair market value.

For determining the return on a dwelling, however, the Supreme Court uses the WOZ value (official property tax value) at the beginning and end of the year. In cases of purchase and sale of dwellings during the year, it is proposed to allocate the value change during that year on a time‑proportionate basis between seller and buyer. Thus, for a sale on 1 July, the value change is split equally between seller and buyer.

In addition, the Supreme Court set rules for calculating the relief to avoid double taxation when actual return is used to determine Box 3 income. In essence, the relief is calculated based on the ratio that the actual foreign return in Box 3 bears to the total actual return in Box 3.

Box 3 Counter evidence Scheme Act

On 19 July 2025, the Box 3 Counterevidence Scheme Act entered into force. This act codifies the Dutch Supreme Court’s case law on determining actual return and also fills certain gaps that the Court has not yet addressed. It sets out the counterevidence scheme, by which the actual return can be demonstrated. To submit counterevidence, the ‘Opgaaf werkelijk rendement’ (OWR; Actual Return Statement) form has been available since July 2025. This Counterevidence Scheme Act is a temporary solution until 2028, when the Box 3 Actual Return Act is expected to enter into force. 

Target Group for Additional Legal Redress in Box 3

The counterevidence scheme applies retroactively to personal income tax (IB) assessments from 2017 onward, provided they had not become final and unappealable as of 24 December 2021 or were issued after that date, and a timely objection was filed or a request for an ex officio reduction was submitted within the usual five-year period. This allows taxpayers with Box 3 income to demonstrate that their actual return is lower than the deemed return. Non-objectors (whose assessments were already final on 24 December 2021) cannot use the counterevidence scheme, unless the Supreme Court decides otherwise in the still‑pending mass objection-plus procedure. 

Time limits

A taxpayer who has not yet received a final assessment for the years 2021 through 2024 will receive an information letter about the OWR form (Actual Return Statement). The taxpayer then has twelve weeks to submit the form. If the return was filed through a tax adviser with a becon number (registered tax agent number), this period is twenty-six weeks. The Tax Administration will then proceed to issue the final assessment. If the final assessment is issued in accordance with the submitted form, the taxpayer is also entitled to a payment of tax interest.

If the final assessment has already been issued, submitting the form within six weeks of the final assessment counts as a notice of objection, or as a request for an ex officio reduction if submitted within five years after the end of the relevant tax year. If a timely objection has already been lodged against the final assessment, or a request for an ex officio reduction has already been filed, submitting the OWR form serves as further substantiation of that objection or request.

See more about the OWR form: the following two pages of the Tax and Customs Administration (not available in English):  

• Questions and answers form Statement of actual return.  
• Frequently asked questions and answers about the Actual Return Statement.

Additional rules beyond the Supreme Court

In determining the actual return, the government lays down the following rules, supplementing the Supreme Court’s case law.

Cash system

The Supreme Court does not indicate in which year direct income should be included in the actual return. According to the bill, the so‑called cash basis should be used, as this also guided the design of the ‘old’ Box 3-system. This means that direct income is included in the actual return at the time it is received or set off, made available, starts bearing interest, or becomes due and payable.

Determination of Actual Return in Box 3 for Personal Use of Homes

The Dutch Supreme Court has held that the personal use of real property -such as a holiday home- in principle forms part of the concept of return in Box 3. However, the practical implementation is complex and requires policy choices by the legislature. The legislature has therefore decided that for the tax years 2017 through 2025, personal use does not need to be reported in Box 3. For 2026 and 2027, it must be reported if the taxpayer invokes the counterevidence scheme to rely on the actual return achieved. 

Application of Debt Threshold in Box 3

Debts are only part of the Box 3 base insofar as they (collectively) exceed the debt threshold. For practical reasons, the debt threshold is disregarded when determining the actual return, making the entire interest on all Box 3 debts deductible.

Reduction of Exemption for Green Investments in Box 3

Green investments are partially exempt in Box 3. In 2024, the exemption is a maximum of 71,251 euros (142,502 euros for fiscal partners) and as of January 1, 2025, a maximum of 30,000 euros (60,000 euros for fiscal partners). When applying the actual return in Box 3, this exemption is applied pro rata based on the situation on January 1. For an exemption of 30,000 euros, a taxpayer with 60,000 euros in green investments on January 1 will have 50 per cent of the actual return on the green investments exempted. 

Legislative amendment to close Box 3 tax loophole for bonds

The government has announced an amendment to the Box 3 counterevidence scheme to close a tax loophole. The loophole arises when purchasing bonds with accrued interest. The amendment will be included in the 2026 Tax Plan and will take effect as of 2026, with retroactive effect to 25 August 2025 at 16:00.

It consists of two measures. The exemption for short-term terms will no longer apply to bonds but will remain in place for bank deposits. In addition, the rule that bonds and other securities with short-term terms are valued at the closing price on the last trading day of the year will be abolished. Instead, they must be valued at their fair market value.

These measures apply only to the counterevidence scheme and not to the calculation of the deemed return in Box 3, because the issue does not arise there.

Holding Box 3 objections

The State Secretary has made procedural arrangements with various stakeholder organizations to make the proceedings as straightforward as possible for taxpayers, tax advisers, and the Tax Administration. In his letter of 20 April 2023, the State Secretary indicated that pending objection procedures concerning Box 3 for the years up to and including 2021 would be put on hold as of 13 March 2023. The Tax Administration must now process these objections in accordance with the counterevidence scheme that is now in force.

Deferring final assessments for 2021 and 2022

To prevent a flood of objections, the Tax Administration deferred issuing final income tax assessments for 2021 and 2022, unless only savings deposits were involved.

In view of the risk of the statute of limitations, the Tax Administration has found it necessary, in rolling out the counterevidence scheme, to use a ‘two-step plan’:

1. The taxpayer is informed that the assessment is being issued based on the deemed return.
2. After receiving the assessment, the taxpayer can provide counterevidence.

To avoid time-barring for issuing final assessments for 2021 and 2022, the Tax Administration will, by 31 December 2025, issue approximately 1.135 million final assessments, and by 30 June 2026, 119.626 final assessments for the 2022 tax year, based on the two-step plan.

Box 3 in 2023 up to and including 2027: bridging regime until introduction new system

The Dutch Cabinet needed time to convert the Box 3 system to one based on the actual return. This new system is not expected until 2028 at the earliest. For this reason, the legislator has introduced bridging legislation as of the year 2023, which is referred to as the ‘flat-rate savings variant’. In other words, you will pay tax based on the deemed returns on your real asset mix, where there are three categories: your bank deposits, your other assets and your debts.

The main difference with the legal redress for the years 2017-2022, with the temporary design of Box 3, taxpayers may also have to pay more tax than in the system for the years 2017-2022. After all, the system with two limits for the years 2017-2022 will lapse as of 2023.

It was up for debate whether this flat-rate savings variant sufficiently aligns with the actual return as intended by the Dutch Supreme Court. This is not the case. In its judgement of 6 June 2024, the Supreme Court ruled that the judicial remedy provided by the legislature was insufficient. The additional redress was subsequently laid down in the Box 3 Counterevidence Scheme Act, which entered into force on 19 July 2025.

We discuss below the main change in the flat-rate savings variant for 2023 to 2027 compared to the flat-rate savings variant for the years 2017 to 2022. The flat-rate savings variant remains relevant, especially if the actual return is higher. In that case, the flat-rate savings variant applies.

A number of refinements to the flat-rate system introduced through the 2024 Tax Plan are as follows:

Homeowners’ association share and escrow account notary qualify as bank deposits  

The share in the assets of a homeowners' association or the assets in an escrow account of a notary qualifies, retroactively to January 1, 2023, as bank deposits for the purposes of the taxation of savings and investments (Box 3). This category better suits these assets because they are usually held in a bank account. This would mean that the lower flat-rate return calculation for bank deposits will apply.

Tax exemption for mutual receivables and debts in Box 3

Effective from 1 January 2023, mutual receivables and debts between fiscal partners, such as those arising from annual settlement clauses in prenuptial agreements, and between parents and underage children are retroactively exempt from taxation. This means that these receivables and debts no longer need to be included in the income tax return. For parents and minor children, this only applies in situations where the income of the minor child is attributed to the parents, as only then the receivable and debt can be offset within the same tax return.

Reference date arbitrage

The bridging legislation introduces provisions aimed at preventing taxpayers from shifting within asset categories around the reference date of 1 January in order to increase assets in the category with the lowest flat-rate of return (bank deposits) to achieve lower Box 3 taxation. This can be done, for example, by selling other assets and repurchasing them immediately after the reference date or taking on debts and repaying them after the reference date. This is called reference date arbitrage.

To avoid reference date arbitrage, temporary conversions of assets within an arbitrage period are ignored for calculating the savings and investment benefit. This is a continuous three-month period starting before and ending after the reference date. This means that conversion acts before 1 October and after 31 March do not qualify as arbitration acts. There is also no arbitrage act if there are more than three months between the conversion and the original transaction. Conversion of other assets into savings (bank deposits) will constitute an arbitration act if 1) the value of the other assets is lower on the reference date than at any other point in the arbitration period after the reference date; and 2) the value of the savings at any point in that period but after the reference date is lower than on the reference date. Reference date arbitrage with debts will be ignored to the extent that the value of those debts is higher on the reference date than at any other time in the arbitration period. 

Business considerations at reference date arbitrage

On request, you can make a plausible case that the conversion acts took place at arm's length. If so, there is no reference date arbitrage. Business considerations mean non-fiscal considerations.

At the tax inspector's request, you must make a reasonable case for your business considerations. Under the free evidence doctrine (‘vrije bewijsleer’), it does not matter in what way you do this. The burden of proof lies primarily on you as the taxpayer. For this, it is sufficient that the conversion acts are based on some business interest. The government currently sees no reason to give a certain weight to business considerations. However, by ministerial regulation, it is possible that further rules are implemented on the application of the arbitrage provision. If, as at reference date 1 January 2023, you conclude that your case involves reference date arbitrage, you can either rectify this by applying for or correcting a provisional assessment for 2023 or correct it in your 2023 income tax return in 2024. 

Green investment bridging legislation

Green investments should be divided into green bank deposits and green investments.

Green bank deposits fall into the asset category of bank deposits, to which the low flat-rate of return applies. Green investments fall into the other assets category, to which a higher flat-rate of return applies. If a taxpayer invests in both asset categories, the green investments exemption is first applied to the green investments. Any remaining part of the exemption is then applied to the green bank deposits. This sequence of applying the exemption is to the advantage of the taxpayer.

No loss relief under bridging legislation

There is no possibility of loss relief in the Box 3 bridging regime. This applies both within Box 3 and between boxes. Loss relief only suits a system of taxation based on actual returns.

Flat-rate return Box 3

The flat-rate return for the different categories in Box 3 for the years 2023 to 2027 is as follows:

* These are provisional percentages, which are used for the provisional assessments. These percentages will only be finalised after the end of the year. 
** This concerns a provisional percentage. This change will be included in the 2026 Tax Plan.

Asset category 3 consists of debts on the reference date. First, a threshold is deducted from the balance of debts (3,400 euros in 2023; 3,700 euros in 2024; 3,800 euros in 2025). If you have a fiscal partner for the entire year, these amounts are doubled.

Actual return under the Supreme Court system

The Supreme Court has, as stated, ruled that even this bridging legislation still violates the ECHR and can have a discriminatory effect in certain cases. In doing so, the Supreme Court has determined how legal redress should take place in those cases, namely on the basis of the actual return. Here, the same principles apply as for the legal redress for the Box 3 levy for the earlier years (2017-2022):

• Actual return includes not only regular benefits from assets (such as interest, dividends and rents) but also changes in the value of those assets.
• This includes positive and negative as well as unrealised changes in value.
• Interest on Box 3 debt is deductible, but other expenses are not. 
• It concerns the nominal return, so no inflation correction takes place.
• Positive or negative returns in other years are not considered (no 'loss set-off').
• Levy-free assets are not considered to determine whether levying on the basis of actual returns is more advantageous than the Legal Redress Act or 'ordinary' Box 3 legislation.

If this is more advantageous for you, then according to the Dutch Supreme Court you are entitled to this favourable treatment.

Furthermore, on 14 June 2024 the Dutch Supreme Court ruled that the statutory provisions must be followed when valuing assets. The main rule is fair market value.

For determining the return on a dwelling, however, the Supreme Court uses the WOZ value at the beginning and end of the year. In cases of purchase and sale of dwellings during the year, it is proposed to allocate the value change in that year on a time‑proportionate basis between seller and buyer. Thus, for a sale on 1 July, the value change is split equally between seller and buyer.

In addition, the Supreme Court set rules for calculating the relief to avoid double taxation when actual return is used to determine Box 3 income. In essence, the relief is calculated based on the proportion that the actual foreign return in Box 3 bears to the total actual return in Box 3.

Box 3 Counterevidence Scheme Act

On 19 July 2025, the Box 3 Counterevidence Scheme Act entered into force. This act codifies the Dutch Supreme Court’s case law on determining actual return and also fills certain gaps that the Court has not yet addressed. It codifies and sets out the counterevidence scheme, by which the actual return can be demonstrated. To submit counterevidence, the ‘Opgaaf werkelijk rendement’ (OWR; Actual Return Statement) form has been available since July 2025. This Counterevidence Scheme Act is a temporary solution until 2028, when the Box 3 Actual Return Act is expected to enter into force. 

Target Group for Additional Legal Redress in Box 3 

The counterevidence scheme applies retroactively to personal income tax (IB) assessments from 2017 onward, provided they had not become final and unappealable as of 24 December 2021 or were issued after that date, and a timely objection was filed or a request for an ex officio reduction was submitted within the usual five-year period. This enables taxpayers with Box 3 income to demonstrate that their actual return is lower than the deemed return. Non-objectors (whose assessments were already final on 24 December 2021) cannot use the counterevidence scheme, unless the Supreme Court decides otherwise in the still‑pending mass objection-plus procedure. 

Time limits

A taxpayer who has not yet received a final assessment for the years 2021 through 2024 will receive an information letter about the OWR form (Actual Return Statement). The taxpayer then has twelve weeks to submit the form. If the return was filed through a tax adviser with a beconnumber (registered tax agent number), this period is twenty-six weeks. The Tax Administration will then proceed to issue the final assessment. If the final assessment is issued in accordance with the submitted form, the taxpayer is also entitled to a payment of tax interest.

If the final assessment has already been issued, submitting the form within six weeks of the final assessment counts as a notice of objection, or as a request for an ex officio reduction if submitted within five years after the end of the relevant tax year. If a timely objection has already been lodged against the final assessment, or a request for an ex officio reduction has already been filed, submitting the OWR form serves as further substantiation of that objection or request.

See more about the OWR form: the following two pages of the Tax and Customs Administration (not available in English):  

• Questions and answers form Statement of actual return.  
• Frequently asked questions and answers about the Actual Return Statement.

Additional rules beyond the Supreme Court

In determining the actual return, the government lays down the following rules, supplementing the Supreme Court’s case law.

Cash system

The Supreme Court does not specify in which year direct income should be included in the actual return. According to the bill, the so‑called cash basis should be used, as this also guided the design of the ‘old’ Box 3-system. This means that direct income is included in the actual return at the time it is received or set off, made available, starts bearing interest, or becomes due and payable. 

Target group for additional redress in Box 3

The counterevidence scheme applies retroactively to personal income tax assessments from 2017 onward, provided these had not yet become final and unappealable on 24 December 2021 or were issued after that date, and a timely objection or a request for an ex officio reduction was made within the usual five-year period. Completing the OWR form is considered a request for an ex officio reduction. This allows taxpayers with Box 3 income to indicate that their actual return is lower than the deemed return. Non-objectors (whose assessment was already final on 24 December 2021) are not covered by this, unless the Supreme Court decides otherwise in the still-pending mass objection-plus procedure.

Determination of Actual Return in Box 3 for Personal Use of Homes

The Dutch Supreme Court has held that the personal use of real property - such as a holiday home - in principle forms part of the concept of return in Box 3. However, the practical implementation is complex and requires policy choices by the legislature. The legislature has therefore decided that for the tax years 2017 through 2025, personal use does not need to be reported in Box 3. For 2026 and 2027, it must be reported if the taxpayer invokes the counterevidence scheme to rely on the actual return achieved. 

Application of Debt Threshold in Box 3  

Box 3 has a debt threshold of 3,800 euros (2025; 3,700 euros in 2024). Debts are included in the Box 3 tax base only to the extent that they (collectively) exceed this amount. For purposes of determining the actual return, the debt threshold is disregarded for practical reasons, making the full interest on all Box 3 debts deductible.

Reduction of Exemption for Green Investments in Box 3 

Green investments are partially exempt in Box 3. In 2024, the exemption was a maximum of 71,251 euros (142,502 euros for fiscal partners) and is as of 1 January 2025, a maximum of 30,000 euros (60,000 euros for fiscal partners). When applying the actual return in Box 3, this exemption is applied pro rata based on the situation on 1 January. For an exemption of 30,000 euros, a taxpayer holding 60,000 euros in green investments on 1 January will have 50 per cent of the actual return exempt.  

Legislative amendment to close Box 3 tax loophole for bonds

The government has announced an amendment to the Box 3 counterevidence scheme to close a tax loophole. The loophole arises when purchasing bonds with accrued interest. The amendment will be included in the 2026 Tax Plan and will take effect as of 2026, with retroactive effect to 25 August 2025 at 16:00.

It consists of two measures. The exemption for short-term terms will no longer apply to bonds but will remain in place for bank deposits. In addition, the rule that bonds and other securities with short-term terms are valued at the closing price on the last trading day of the year will be abolished. Instead, they must be valued at fair market value.

These measures apply only to the counterevidence scheme and not to the calculation of the deemed return in Box 3, because the issue does not arise there.

Foreign assets and debts

If Box 3 income is determined on a flat-rate basis, the relief to avoid double taxation is calculated based on the proportion that the flat-rate foreign income in Box 3 bears to the flat-rate total taxable income in Box 3. The Supreme Court has set rules for calculating the double tax relief based on actual return. These rules mean that the relief is calculated according to the proportion that the actual foreign return in Box 3 bears to the total actual return in Box 3. For the years 2023 and onward, these rules are included in the 2001 Decree on the Avoidance of Double Taxation.

Budgetary shortfall

The postponement of the entry into force of the Box 3 Actual Return Act to 2028, the D-Day judgements of 6 June 2024, and the judgement in which the Supreme Court held that the benefit from personal use of real property must be set at nil under current law, result in a budgetary shortfall. In the Spring Memorandum, the government indicated it would cover this shortfall with two measures. First, it will raise the deemed return for other assets to 7.78 per cent as of 2026 (2025: 5.88 per cent). Second, it will lower the tax-free allowance as of 2026 to 51,396 euro (2025: 57,684 euro).

Box 3 from 2028: combination of an asset accumulation tax and a capital gains tax

On 19 May 2025, the government submitted the Bill on Actual Returns in Box 3 to the House of Representatives. The bill’s premise is to tax Box 3 based on actual returns, starting in 2028. It provides a solution to the Supreme Court’s 2021 Christmas Judgement, in which the Court held that the flat-rate Box 3 system violated the European Convention on Human Rights. The bill differs in several respects from the draft bill previously published for consultation. We have set out the key features of the new Box 3 system for you.

The new system is a hybrid, with an asset accumulation tax as the baseline, combined with a capital gains tax for property and for shares in, and profit-participation certificates of, start-up enterprises.

In December 2024, the Council of State stated that there were compelling legal and practical objections to the bill and advised against submitting it in that form. The government maintains that ‘all things considered, the proposed system for a tax based on actual returns is the best option.’

Depending on the composition of your Box 3 assets, this new system can have a considerable impact. The bill largely addresses the widespread public criticism of the current Box 3 regime and, for the most part, will no longer tax wealth on a flat-rate basis. A drawback is that the new system is quite complex and requires greater effort from taxpayers. It is therefore important to examine what the consequences are for your situation.

Effective date

For introduction as of the 2028 tax year, the House of Representatives must adopt the law by 15 March 2026 at the latest. The period thereafter is needed by chain partners (such as banks and insurers) and the Dutch Tax Administration to, among other things, build and set up new databases in their data systems and put the appropriate infrastructure in place. This means the current system of deemed returns with a counterevidence scheme will remain in force until 1 January 2028.

Asset accumulation tax as the main rule

In the proposed new Box 3 system, the actual return on savings and investments is taxed on an asset accumulation basis as the general rule. This means that each year not only income from assets (such as interest, dividends, and rent) but also increases in asset values are taxed. As now, this requires the annual valuation of assets and liabilities at fair market value.

Because an asset accumulation system taxes value increases annually, it prevents prolonged deferral of taxation. It also spares taxpayers and chain partners, such as banks and insurers, from having to keep long‑term records of historical purchase prices and investments. A drawback of an asset accumulation tax is that taxpayers must pay tax on value changes they have not yet realised.

Capital gains tax as an exception

To avoid requiring taxpayers to pay tax on value increases of less liquid assets, such as property and shares in, and profit-participation certificates of, start-up enterprises, tax on those value increases is only levied when the taxpayer actually realises them. To that end, upon acquisition these specific assets are valued for Box 3 purposes at their acquisition price. Upon sale, you must pay tax on the difference between that acquisition price and the current sale proceeds: the realised value increase. A tax settlement is also triggered if the assets no longer meet the conditions for capital gains treatment or move to Box 1 or Box 2. In that case, the deemed sale price is the fair market value.

Assets already owned at the start of the new system are valued at fair market value at the beginning of the 2028 calendar year. Otherwise, gains or losses from before 2028 would be wrongly brought into tax. For dwellings, the fair market value at the start of 2028 is set at the WOZ value with reference date 1 January 2028 (WOZ assessment 2029). For rented dwellings, the ‘leegwaarderatio’ (the statutory rent-adjusted value factor) is still applied to determine fair market value.

Net worth comparison with an arm’s‑length test

The Box 3 income from the total Box 3 assets, insofar as they fall under the asset accumulation regime, is determined by a net worth comparison: the difference between the fair market value (waarde in het economisch verkeer, WEV) of the net assets (assets minus liabilities) at year‑end and at the beginning of the calendar year, reduced by contributions and increased by withdrawals in the year concerned. The starting point is the nominal amount of the opening and closing net worth of the total Box 3 assets; in other words, no inflation adjustment is made. The net worth comparison includes an adjustment for contributions and withdrawals (at fair market value at the time of the contribution or withdrawal) that do not relate to the Box 3 assets. This ensures that only taxable asset movements within Box 3 are taxed. A contribution occurs when there is a new asset (for example, an increase in a bank balance) or when a liability no longer forms part of the Box 3 assets. A withdrawal is the opposite of a contribution: it occurs when an asset no longer forms part of the Box 3 assets (for example, spending on groceries) or when a new liability is incurred.

Arm’s‑length test

In related‑party relationships (for example, between parent and child or between a taxpayer and their own company), transactions may be concluded on terms that differ from comparable transactions between independent parties. This makes it possible, among other things, to create losses that would not arise in comparable arm’s‑length transactions. Therefore, in the new Box 3 system, just as in Box 1 and Box 2, an arm’s‑length test is used to determine the actual return.

Deductible expenses

Certain expenses can be deducted under the new Box 3 system. The guiding principle is that only expenses related to the collection, preservation, and acquisition of regular returns (such as interest, dividends, and rent) may be deducted directly, for example, maintenance and management costs. Interest paid on Box 3 debts is treated as negative Box 3 income.

Improvement costs and costs incurred to acquire a Box 3 asset, for example, transaction costs for buying and selling investments, are treated differently under the asset accumulation tax than under the capital gains tax. Under the asset accumulation tax, these costs are treated as a ‘contribution.’ Under the capital gains tax, they increase the acquisition price, so the costs are only deducted upon sale when determining the disposal gain.

To avoid disputes, the statute lists certain expenses that are by definition non‑deductible. These include mixed‑purpose costs, such as phone subscriptions, literature, and conferences. Fines, penalty payments, and dividend and gambling taxes are also non‑deductible.

Cash system

Generally, deductible expenses are recognized on a cash basis, i.e., when the taxpayer no longer has disposal over the amount due, for example, when the amount is paid, set off, made available, or starts bearing interest. The cash basis also applies to regular returns, which as a rule are taxed when they are received, set off, made available, start bearing interest, or become due and collectible.

For both deductible expenses and regular returns, however, if they relate to a period longer than one year or to a period that ends later than six months after the end (for expenses) or before the start (for returns) of the calendar year, they are allocated to the calendar year to which they relate (receivables/accrual basis). This system is intended to prevent taxpayers from bringing forward deductible expenses or deferring income far into the future.

Categories of property

Direct return is the return (in cash or in kind) that a taxpayer earns annually from the property, such as rent and lease income, minus maintenance costs. How this direct return is determined depends on how the property is used. In the new Box 3-system, three categories of property are distinguished:

1. Is the property rented out for at least 90 per cent of the year?
   Then the rent and lease income received is taxed.
2. Is the property not rented out at all during the year?
   In that case, the benefit from having the property available for personal use is taxed. This benefit is calculated using a property add-on of 3.35 per cent of the WOZ value (official municipal property value).
3. Is there mixed use (rented out for less than 90 per cent of the year)?
   Then the rental income is compared with the property add-on. The higher of the two amounts is taxed.

Annual maintenance and other periodic costs are deductible in all situations and reduce the taxable amount. Improvement costs and costs incurred to acquire a property must be added to the property’s cost price.

The property add-on percentage will be recalibrated for the first time after five years.

Start-up enterprises

Shares in, and profit-participation certificates of, start-up enterprises also fall under the capital gains tax. The bill defines a start-up as (i) a company (a BV or NV) that (ii) carries on a business, (iii) was incorporated no more than five years ago, and (iv) has annual turnover not exceeding 30 million euros.
In addition, no more than 25 per cent of the shares may be held by a company that is not itself a start-up.

The definition of start-ups may still change. In a parliamentary letter of 2 June 2025, the State Secretary indicated that the government intends to use a new definition of start-ups and scale-ups for both the future Box 3 system and the announced new employee stock option scheme in payroll taxes. Any change is intended to be incorporated into the bill via a memorandum of amendment.

Rate and tax-free income

The current tax-free allowance will be replaced by a tax-free result. The bill sets a tax-free result of 1,800 euros. Small annual returns in Box 3 thus remain untaxed. The rate in Box 3 will remain at 36 per cent.

Loss offsetting

In the new Box 3 system it will be possible to offset losses. A loss in Box 3 can be offset indefinitely in the future against positive Box 3 income from subsequent years (carry-forward). A threshold of 500 euros per year applies to this. Minor losses therefore cannot be offset against other years. Carry-back is not available in the new Box 3-system. Loss offsetting can only take place within Box 3, which means that a Box 3 loss cannot be offset against Box 1 or Box 2 income.

Exemptions

The current exemptions in Box 3 will be continued unchanged under the new system. However, this does not apply to the exemption for short-term instalments and obligations, because in the new system it is also desirable to consider interest on short-term debts. The exemption for green investments will expire on 1 January 2027 under the 2025 Tax Plan.

Movable property for personal use, such as cars, caravans and boats, will, as in the current Box 3 system, remain outside taxation, unless it is held primarily as an investment.

Rights of enjoyment

Specific valuation rules apply to rights of enjoyment, such as usufruct or leasehold. Periodic fees for a right of enjoyment, such as an annual ground rent (canon) in the case of leasehold, are taxed as direct income for the bare owner and are deductible as expenses for the holder of the enjoyment right.

A one‑off arm’s‑length consideration for the acquisition of a right of enjoyment does not lead to a change in net assets for either the seller or the buyer and therefore does not result in taxable income. Each year, the remaining term of the right of enjoyment becomes shorter, causing the value of the bare ownership to rise and the value of the right of enjoyment to fall. These value changes are taxable for the bare owner and deductible for the holder of the enjoyment right. It is proposed to calculate these value changes on a time‑proportionate basis.

An exception to the foregoing is the purchase of bare ownership of real property or of shares in, or profit‑participation certificates of, a start‑up enterprise. In that case, the increase in value of the bare ownership as a result of the passage of time on the right of enjoyment is only taxed upon disposal or upon the end of tax liability.

Debt cancellation benefit exemption

The bill also includes a debt cancellation benefit exemption, somewhat comparable to that in income tax and corporate income tax. The debt cancellation benefit at the debtor is exempt if there is a cancellation of a financially impaired claim and to the extent the income exceeds the offsetable losses.

Emigration

Emigration leads to a deemed disposal of shares in, and profit-participation certificates of, start-up enterprises and of real property located abroad, to safeguard the Dutch tax claim over the value changes. These items of income are designated as income to be preserved, for which a protective assessment with deferred payment is imposed. In practice, the deemed disposal of real property will be limited to real property located in a non-treaty country, since under the tax treaties concluded by the Netherlands, the taxing right over income from real property is allocated exclusively to the state in which the real property is situated.

Higher administrative burden for taxpayer

A system based on actual returns requires more data than the current flat-rate system. Data from chain partners will remain relevant, so as much data as possible will be pre-completed in the tax return. But more data will often be relevant. As a result, there will also be an administration obligation for taxpayers with Box 3 assets. This record-keeping obligation will apply to real property, other assets that were acquired by the taxpayer without the intermediation of a financial institution, and debts incurred with private individuals and foreign financial institutions.