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Netherlands: Proposals for changes to individual income taxation (income from savings)

Netherlands: Proposals for changes to individual income

The Deputy Minister of Finance in early September 2019 announced that a bill would be presented before the summer of 2020 to amend the taxation of income from savings and investments in Box 3.

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According to initial calculations, taxpayers with savings only would, in effect, no longer pay tax on their savings on amounts up to a threshold of approximately €440,000. The new regime is proposed to be effective 1 January 2022.


Summary 

The change was prompted by the sharp fall in interest rates on savings accounts in recent years and the subsequent widely felt need in society to bring the Box 3 tax more in line with the actual savings returns earned by individual taxpayers. The proposal would use the actual ratio between a taxpayer’s savings, investments, and debts. A fixed interest rate on savings would be set (and in line with the most recently available (average) savings interest rate) and would be lower than the presumed return on investment.

Taxpayers with savings only would, in effect, no longer have to pay tax on their savings up to approximately €440,000, but this amount would probably change in 2022. Furthermore, investors with assets less than approximately €30,000, and who now pay no tax, would also not pay tax in the future. For those who pay tax, the tax rate would be approximately 33%. 

The Deputy Minister indicated that the proposal would be worked out in a bill that would be sent to the Lower House before the summer of 2020.

Read a September 2019 report prepared by the KPMG member firm in the Netherlands

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