While the details of future wealth tax in the Netherlands are still being worked out, one thing is sure: if you have a fiscal partner, this “box 3” tax can be less of an issue.

Blue Umbrella, which has helped thousands of internationals with their Dutch tax affairs, says that many are not aware of the way the Dutch system allows tax partners to artificially “divide” their wealth – without doing anything more than filing their return.

“At the moment, there is a lot of discussion about ‘box 3’ assets, and how they can be taxed – but if you have a tax partner who has no income, then this can be beneficial because whatever happens, you can have an extra tax credit,” says a Blue Umbrella advisor.

Boxes

The Dutch divide income into three categories for tax purposes. Box 1 covers income from your employment and any mortgage on your home; box 2 is for investments of more than 5% in a company, including your own business, and box 3 is income from investments, a second property, and savings accounts.

Unlike many other countries, the Dutch do not tax actual income in this “box 3” but have until now levied a notional tax on the amount they assume you are making with any wealth you have – although this will soon change and the Dutch will for the first time have a capital gains tax.

In the meantime, “box 3” has added flexibility for people who are considered to be fiscal partners. Certain deductible expenses and box 3 assets can be split between tax partners for tax purposes (although this does not apply to all income or property).

Divide your expenses

“The benefit is that you can divide certain deductible expenses between you and your tax partner in the most beneficial way, if one has an income and the other does not: donations made by your partner, for instance, additional medical expenses, and also assets. This means that the tax credits you both have can be used,” the advisor says.

There is a general tax credit given to everyone; another could be the income-related combination tax credit, for those people with a child under the age of 12, given to the person with the lower income.

In some other countries, you can choose, for instance, to put a second property in the name of one partner rather than the other, involving a legal process. But this tax division in the Netherlands has absolutely no impact on who actually owns the assets and it is perfectly legal. “I hear people say: but does this have legal consequences? Do I lose that money?” says the advisor. “The answer is: no, it’s only for tax purposes.”

Who is a partner?

You are considered fiscal partners if you are registered at the same address and meet at least one other condition. You may have been tax partners in previous years, be married, have a cohabitation contract drawn up by a notary, be joint owners of the house you are living in or have a child together.

If you are named as the beneficiary of your partner’s pension and live at the same address in the tax year for which you are filing, you may also be considered a tax partner – but only if the pension is legally enforceable and you have declared it to the Dutch tax authority.

Claiming the perks of fiscal partnership can be surprisingly helpful, especially if you have a child under 12 living with you. “It can be a few thousand euros – although the minimum benefit is probably tens of euros,” he said. “It’s as simple as ticking a box and dividing the assets.”

30% ruling

If you or your partner has been granted the 30% ruling for scarce skills – which means the first 30% of your income is free of tax – the rules have changed about wealth.

If you had the ruling before January 1, 2024, you can claim to be a partial non-resident for tax purposes, meaning that any foreign wealth is not liable for income tax in the Netherlands but declared in your home country – which means 2026 is the last year that you can do this.

However, if you obtained the ruling later, you have to declare all of your foreign assets because this partial tax residency option has been abolished. Any highly-skilled workers granted the 30% ruling after January 1, 2025, will not have been able to use the foreign asset tax break at all.

This means it can be even more sensible to look at whether dividing the assets between fiscal partners can save you money by taking advantage of all of the tax credits you are both eligible to use. If you are taking advantage of the chance to report your actual income from savings and investments in box 3 in past years, because this is lower than the notional return, bear in mind that fiscal partnership could be useful here too.

While many countries have similar rules to give a tax break to partners – sometimes only for married ones – the Netherlands is relatively unusual in allowing couples to divide assets and expenses notionally. “I think it will be a surprise because people from other countries probably only had the standard extra tax credit, but here you can divide certain income between you and your partner in the most tax-beneficial way,” said the advisor. “And you don’t actually have to give it to them either!”

Contact Blue Umbrella for personal advice and help with your tax