Hundreds of thousands more people in the Netherlands are set to pay tax on their savings and investments from 2028 under a revised plan for box 3, the tax on wealth, according to leaked details of the cabinet’s deliberations with opposition parties.
Box 3 covers savings, shares, crypto and second homes, and around 2.5 million people currently pay it, according to broadcaster NOS. At present the tax rate is 36% on an assumed return on those assets, with a tax-free allowance of €59,357 per person.
Under a new law on box 3 rules approved by MPs in February, people were to pay tax on unrealised returns on most assets every year, meaning they would pay tax on increased asset values regardless of whether they have sold the assets and made any money.
This plan is set to be dropped for shares, according to NOS, and people will only pay tax on gains from shares once they sell them. This was a demand by right-wing parties such as far-right JA21.
Initially, the new system was to allow a tax-free return of €1,800 per person a year. That has reportedly been cut to €1,000, helping offset the losses anticipated by moving to a realised gains system.
Businesses affected
People who run their own private limited company (bv) will also be affected. The amount they can borrow from their own company on favourable tax terms is set to fall from €500,000 to €100,000. The rules on borrowing from a company to buy a home will stay the same.
At the same time, tax on profits that owners pay out to themselves will be cut for 4 years. The aim is to encourage them to take money out of the company, which would bring in extra tax revenue in the short term.
The measures are expected to raise almost €500 million more than needed. The cabinet wants to use that to cut income tax, but has not yet said how.
Welfare cuts dropped
The leaked plans also confirm that planned cuts to social security are off the table, as left-wing Pro and pan-European party Volt said this week. Hans Spekman, chairman of the country’s largest trade union FNV, said on Monday evening that the unions would return to talks with the cabinet if the cuts were scrapped. Political sources told NOS that could happen as soon as next week.
JA21 said part of the funding for the box 3 changes was “unacceptable” because it hits small investors. Jan Struijs, parliamentary leader of pensioners’ party 50PLUS, said he wanted a “stress test” to show what the plans would mean for police officers, nurses and pensioners.
Finance minister Eelco Heinenis expected to set out the details in a letter to parliament ahead of this week’s budget debate. The minority cabinet needs opposition votes to get its budget through both houses of parliament.
