Box 3 taxes in the Netherlands: What expats need to know

If you live and work in the Netherlands, you must file a Dutch income tax return. For many expats, this includes assets, better known as Box 3, which covers savings, investments, and other valuables that store or generate wealth.

As of 2025, new rules affect how Box 3 tax is calculated and understanding them can help you reduce your tax liability. 

What is Box 3?

While Box 1 taxes your income and Box 2 taxes income from a substantial interest, Box 3 taxes your assets rather than income. This includes bank accounts, shares, bonds, cryptocurrencies, second homes, and certain loans. Your primary residence is excluded from Box 3 and is taxed under Box 1.

If you are a resident of the Netherlands, you are required to declare your worldwide savings and investments, including assets held abroad, if the total value exceeds the applicable tax-free threshold.

Who must declare assets in 2025? 

Box 3 applies if your net assets (assets minus debts) exceed the threshold on January 1, 2025:

• €57.684 per person
• €115.368 for fiscal partners

Assets above these amounts must be reported regardless of where they are held, as Box 3 applies to assets owned worldwide, making careful assessment essential for expats. 

Get help with declaring your assets

New rules: Fictional vs. real return

For the 2025 tax year, Box 3 taxation operates under a transitional system. You can choose between the fictional return method (assumed return) and the real return method, which is based on actual income from assets. The Dutch tax authorities assess both methods, and the most favourable outcome applies.

Under the fictional return method, the tax authorities calculate Box 3 tax using assumed rates of return that differ per asset category, such as savings, investments, and debts. These assumed returns apply regardless of how your assets actually performed during the year.

The real return method, by contrast, is based on what you actually earned. This includes interest on savings, dividends, rental income, and realised capital gains, minus allowable costs and losses. If your actual returns are lower than the assumed returns, this method can result in a lower tax liability.
This distinction is particularly relevant for expats, as returns on foreign savings accounts, investments, or property may differ significantly from the Dutch assumed rates.

Why did the Box 3 system change?

The Box 3 system was originally designed to tax wealth in a simple and uniform way. However, over time, it became clear that using a fictitious return led to situations in which taxpayers paid tax on income they had not actually earned.

This issue was especially relevant for people with savings or low-risk investments, particularly in years with low interest rates or poor investment performance.

As a result, the old Box 3 system became the subject of legal challenges. The Dutch Supreme Court ruled that taxing assets based on a fictitious return, without sufficient consideration of actual income, violated property rights. This made the original system legally unsustainable.

Following this ruling, tax policy shifted toward a system that better reflects economic reality. The focus moved to:

• Taxation based on actual income and value development
• Avoiding taxation on income that does not exist
• Improving legal certainty and fairness for taxpayers

This shift illustrates a clear trade-off: the former fictitious system was simpler but often unfair, while the new actual-return approach is fairer but more complex.

Changes coming in 2028

The transitional system ends in 2028. From then on, only the real return method applies, so acting during the transition years can significantly reduce your tax due. 

Declaring your assets doesn’t have to be difficult

Box 3 taxation can be complex, especially for expats with international assets. The 2025 rules offer opportunities to pay less tax if handled correctly. To make sure you don’t miss out on these opportunities, it is a good idea to enlist the help of a tax advisor.