NETHERLANDS Trends and Developments Contributed by: Frans Sonneveldt and Mike Vrijmoed, Forvis Mazars NV
As mentioned, the current Box 3 system is a tem - porary measure, with substantial changes expected from 2028 onwards. The draft proposal introduces, as its primary feature, an asset accumulation tax. Under this new approach, the actual return on savings and investments will be taxed, encompassing both income from assets and realised and unrealised capital gains on an annual basis. The scope of wealth considered under the proposed Box 3 system remains consist - ent with the current system, divided into two main categories: • real estate property and shares/profit certificates in family businesses or start-ups – in this category, actual income and capital gains will be subject to taxation, although a distinction shall be made between types of real estate properties. • other assets and liabilities, including bank bal - ances, will be taxed. The draft proposal has not yet specified a definitive tax rate for Box 3 income. However, based on financial projections accompanying the consultation proposal, estimates suggest a rate between 33 and 37%. The final decision on this rate, as well as the determina - tion of the tax-free income threshold (formerly known as the tax-free base), will be made by the incoming cabinet. These developments in Box 3 have major implications for high-net-worth individuals and their advisors. It is crucial to closely monitor the situation and adjust wealth structuring where necessary. Despite the increasing combined corporate income tax rates and box 2-rates, many high net worth individuals and their advisors opt to structure wealth through companies. The Expat-facility: Phasing Out a Favourable Scheme for Expats The Expat-facility (also formerly known as the 30% facility) allows eligible incoming employees to receive up to 30% of their gross salary tax-free. From 2025, the scheme applies up to a maximum wage of EUR246,000. The scheme is being gradually phased out over five years. The option for partial foreign tax liability was abolished as of 1 January 2025, with transitional arrangements
for existing cases. For high-net-worth individuals, this was the most significant benefit of the facility. Gift and Inheritance Tax: Refinement The applicability of Dutch gift and inheritance tax is determined by the donor’s or the deceased’s place of residence. These taxes are levied on the total value of assets acquired through gift or inheritance from an individual who was a resident of the Netherlands at the time of the gift or death. In this context, the recipi - ent is considered the taxpayer. For Dutch tax law purposes, residency is determined based on all relevant facts and circumstances. How - ever, certain individuals are specifically deemed to be residents of the Netherlands for gift and inheritance tax purposes: a Dutch national who had been residing in the Nether - lands and either dies or makes a gift within ten years of departing the country; or any person who has resided in the Netherlands and makes a gift within one year of leaving the country is eligible. Certain exemptions can be applicable, depending on the relationship between the donor/deceased and the donee/beneficiary and the object of the gift/inherit - ance. For family businesses, the business succession facility is of great importance. The facility is a com - bination of a tax deferral in the income tax and an exemption in the gift and inheritance tax. Upon request and if certain conditions are met, busi - ness assets up to EUR1,500,000 are fully exempt from gift and inheritance tax, and the effective tax rate for business assets exceeding EUR1,500,000 is 5% in 2025 instead of 20% (parents/children). A conditional deferral of payment can be obtained for the remain - ing taxes. Some of the other changes: • from 1 January 2024, real estate rented to third parties is excluded from the scheme.
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