{"id":980,"date":"2020-08-27T09:09:25","date_gmt":"2020-08-27T07:09:25","guid":{"rendered":"https:\/\/vwg.nl\/uncategorized\/ook-progressie-in-box-3\/"},"modified":"2026-03-03T10:33:52","modified_gmt":"2026-03-03T09:33:52","slug":"progress-in-box-3-as-well","status":"publish","type":"post","link":"https:\/\/vwg.nl\/en\/ook-progressie-in-box-3\/","title":{"rendered":"Progress in Box 3 as well"},"content":{"rendered":"

\"\"<\/p>\n

Nothing new, enthusiasts will say. Yet the Court of Appeal in The Hague has recently issued a ruling<\/a> done and dusted.<\/p>\n

Progression<\/h4>\n

The term \u2018progression\u2019 refers to the effect whereby the tax due increases as income rises. In Box 1 (income from employment and property), the progression is reflected in the tax rate. Income in Box 1 up to \u20ac68,500 is taxed (in 2020) at a rate of 37.35%. For the portion of income above \u20ac68,500, the rate is 49.5%.<\/p>\n

However, income in box 3 (income from savings and investments) is taxed at a proportional rate of 30%. Under this rate, the tax does not increase when the income in box 3 is higher. The progressive nature of the tax in box 3 is due to the way in which the income is calculated.<\/p>\n

Income in Box 3<\/h4>\n

After all, in Box 3, it is not the actual income that is taxed, but a flat-rate calculated income. Until 2017, this income amounted to 4% of the tax base. There was therefore no progressive taxation at that stage.<\/p>\n

From 2017 onwards, however, the flat-rate income in box 3 increases as the value of the assets taxed in box 3 rises. In 2020, the flat-rate income in box 3 is calculated as follows:<\/p>\n\n\n\n\n\n\n
G<\/strong>basis:<\/strong><\/td>\nIncome:<\/strong><\/td>\n<\/tr>\n
up to \u20ac72,798<\/td>\n1,789%<\/td>\n<\/tr>\n
from \u20ac72,798 to \u20ac1,005,573<\/td>\n4,185%<\/td>\n<\/tr>\n
over \u20ac1,005,573<\/td>\n5,28%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Property in Switzerland<\/h4>\n

The case before the Court concerns a Dutch national who owns a (holiday) home in Switzerland. Under the tax treaty with Switzerland, the Netherlands must grant a deduction for tax paid elsewhere in respect of the Swiss property. Under international tax law, property is subject to income tax in the country where it is situated.<\/p>\n

However, the Netherlands does include the Swiss property in its tax base (the treaty also permits this). This means that the flat-rate income for Box 3 is calculated on the basis of the value of the Swiss property. The \u2018taxed elsewhere\u2019 allowance is then calculated using the following fraction: value of the Swiss property \/ tax base for Box 3.<\/p>\n

Suppose the Swiss property is worth \u20ac150,000. The total taxable base for Box 3 (including the property) amounts to \u20ac400,000. Until 2017, the flat-rate income from Box 3 was: 4% * \u20ac400,000 = \u20ac16,000. The tax on this income amounted to: 30% * \u20ac16,000 = \u20ac4,800. The deduction for income taxed elsewhere amounts to: (\u20ac150,000 \/ \u20ac400,000) * \u20ac4,800 = \u20ac1,800, which is equal to 30% * 4% * \u20ac150,000.<\/p>\n

In 2020, the flat-rate income is (1.789% * \u20ac72,798) + (4.185% * \u20ac327,202) = \u20ac14,995. The tax amounts to: 30% * \u20ac14,995 = \u20ac4,498. The deduction for tax paid elsewhere amounts to: (\u20ac150,000 \/ \u20ac400,000) * \u20ac4,498 = \u20ac1,687. This is less than 30% * 4.185% * \u20ac150,000 (= \u20ac1,883). This is because the Netherlands retains the progressive tax rate resulting from the calculation of the flat-rate return in box 3.<\/p>\n

The Court has ruled that the \u2018taxed elsewhere\u2019 deduction calculated by the Tax and Customs Administration is in accordance with the tax treaty with Switzerland.<\/p>","protected":false},"excerpt":{"rendered":"

Niets nieuws, zullen de liefhebbers zeggen. Maar toch heeft het Gerechtshof Den Haag er recent een uitspraak over gedaan. Progressie Met het begrip progressie wordt gedoeld op het effect dat de verschuldigde belasting hoger is naarmate het inkomen hoger is. In box 1 (het inkomen uit werk en woning) zit de progressie in het tarief. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-980","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts\/980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/comments?post=980"}],"version-history":[{"count":0,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/posts\/980\/revisions"}],"wp:attachment":[{"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/media?parent=980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/categories?post=980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vwg.nl\/en\/wp-json\/wp\/v2\/tags?post=980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}