Taxation of savings and investments (so called ‚Box 3 income’ has changed in 2023 for the worse if you hold such savings and or investments. It is to compensate the lack on tax on bank balances.
The 2023 taxation in Box 3 has changed significantly. Roughly said taxation of income in Box 3 is for instance the property you own minus the debt times 1.4%.
First the 1.4% rate is not applicable anymore. In the old days if you had EUR 170.000 in Box 3 you were assumed to have made about EUR 4.888 result which was taxed at 31% being EUR 1.515. Those of you who are good with math will learn that the 1.4% was not even reached. But the more you own the more you see the percentage go to 1.4% in the end.
In 2023 everything is different. Money in the bank is hardly taxed on Box 3: 0,36%. But the assumed yield on investments is 6,170%. Over EUR 170.000 that is suddenly EUR 10.489. Then the tax rate in box 3 is now 32%, hence you are to pay EUR 3.356 tax over the EUR 170.000 in investments which was EUR 1.515 Box 3 tax in 2022.
Double the tax is charged
Double the tax is basically charged over your investments in 2023. On the other side, over your cash in the bank much less tax is charged. Currently inflation is about 14%, who is wise, does not keep money in the bank, but invests.
Have we seen it all? Nope
Debts are not equally taken in to account in 2023
Since 2001 the Box 3 calculation was simple. You have invested EUR 500.000, you took out a loan of EUR 500.000 to pay for the investment, and no Box 3 taxation is applicable.
No more. In 2023 you are assumed to have yielded over EUR 500.000 a 6,170% revenue, being EUR 30.850. Set off against this income is the EUR 500.000 debt. Or actually EUR 493.200 debt, as the first EUR 6.800 debt is not taken into account. The percentage of debt costs is now assumed 2,57% being EUR 12.675. Suddenly you pay over EUR 30.850 minus EUR 12.675 is EUR 18.175 a tax rate of 32% being EUR 5.816.
This EUR 5.816 was supposed to be zero, when in 2001 this Boxing system was introduced. The EUR 500.000 debt was to be set off against EUR 500.000 investment. Which is zero tax in Box 3.
Note: in the above calculations the tax free amounts have not been incorporated for a more pure calculation purpose. In 2023 the tax free amount is EUR 57.000, but is affected by the combination of money in the bank and investments.
On introduction in 2001 the Box 3 system was simple. Over your assets minus your debts you paid 1.2% tax. In 2017 the Dutch tax office thought it was wise to make a distinction between money in the bank and investments. With negative interest and an assumed income, the high court ruled this illegal.
Now the civil servants working with the Dutch Government go back to a proven method: make it complex so nobody understand, hence nobody can check what we do is indeed correct. That applies now, the Box 3 calculation has become rocket science.