Savers with over €57,000 to lose much more to Box 3 tax due to higher interest rates

Taxpayers with more than 57,000 euros in savings will pay much more capital gains tax in Box 3 for 2023 than was stated in their provisional assessment. Savers above the tax-free amount pay a 32 percent tax on the returns on their savings. The provisional assessment set the return at 0.36 percent. But due to savings interest rates increasing significantly last year, the Tax Authority will assume savers achieved a 0.92 percent return on their savings in 2023, the Financieele Dagblad reports based on calculations by ABN Amro MeesPierson.

The higher tax will be an unpleasant surprise to many savers, René Bruel, a wealth planning expert at ABN Amro Mees Pierson, told FD. “We notice that our customers, after the low interest rates of recent years, assumed that they would pay no or hardly any tax on their savings,” he said. In 2022, the Tax Authorities assumed a 0 percent return on savings and applied a 0.01 percent return in 2021.

The Tax Authority has not yet officially announced the return percentage for savings, deposits, and cash on which capital gains tax must be paid in Box 3. But, the data from De Nederlandsche Bank (DNB) that the Tax Authority uses for this are available. Based on this data, Bruel calculated the assumed return on savings for 2023 at 0.92 percent.

The 32 percent tax applies to the portion of savings and investments above the tax-free allowance - 57,000 euros for savers without a tax partner and 114,000 euros for those with a tax partner. These savers will ultimately pay over 2.5 times as much Box 3 tax than stated in their provisional assessment, Bruel said. He added that these savers also earned more from their savings and investments in 2023 due to the higher interest rates, so the higher tax is less unfavorable in practice.

The difference between the provisional and final assessments is the result of the Supreme Court ruling in 2021, ordering the government to better align the assumed returns in Box 3 with the actual income from savings and investments. The government intends to eventually fully base the tax in Box 3 on actual revenues.

The Ministry of Finance told FD that it could not yet confirm the return percentage calculated by the ABN Amro expert. But, the calculation method provided by the Ministry of Finance based on DNB data does correspond with the calculation ABN Amro MeesPierson used to arrive at a 0.92 percent return.