Through 2022 the way the Netherlands taxed savings and investments was based on a deemed asset allocation and a deemed rate of return. This was calculated in “Box 3”. So your tax was based on an asset allocation that was almost certainly not accurate and also based on a deemed return on these assets that was almost certainly not correct. The system punished people for having a lot of cash, since you were assumed to have invested your money even if it was sitting in cash.
For example, for 2021 the assumed asset allocation for an indivudal with € 2M of assets (after exemption) was € 222,500 of cash and € 1,777,500 of investments, regardless of their actual asset allocation. This is calculated as follows:
| Income Tax Brackets / Allocations | Amount | Allocation | Allocated Assets | Deemed Income Rate | Deemed Income | |
| First bracket – low | € 50,000 | 67% | € 33,500 | Cash | 0.03% | € 10 |
| First bracket – high | € 50,000 | 33% | € 16,500 | Investments | 5.69% | € 939 |
| Second bracket – low | € 950,000 | 21% | € 189,000 | Cash | 0.03% | € 57 |
| Second bracket – high | € 950,000 | 79% | € 711,000 | Investments | 5.69% | € 40,456 |
| Third bracket | > € 950,000 | 100% | € 1,050,000 | Investments | 5.69% | € 59,745 |
| Total Deemed Income | € 2,000,000 | € 101,207 | ||||
| Tax Rate | 31% | |||||
| Box 3 Tax (before credits / exemptions) | € 31,374 |
This methodology was extremely unfair for people with a lot of cash, since they were assumed to have a deemed return of 5.69% even if they actually had a return of 0% or even a negative return.
One solution to this problem was to move your cash into something called a “Spaargeld BV” (Savings BV), which is a type of Dutch corporation. This shifted the assets out of “Box 3” and into “Box 2”. This had the benefit of you paying around 40% tax on the actual income (combined corporate tax plus dividend tax) rather than based on a deemed income. If your earnings were in fact zero, this meant zero tax. Compare this to the table above, where a person having € 2M of cash would pay EUR 31,374 in Box 3 or zero in a Spaargeld BV.
A court case was started by a few individuals who were being hit with this high taxation on their cash, and the courts ultimately agreed with their arguments, resulting in a recalculation for tax years 2017 through 2022 using an individual’s actual asset allocation. Ultimately you paid tax based on the lower of the two calculations (the deemed asset allocation or the actual asset allocation).
As of 2023 there will only be one calculation, based on the actual asset allocation (which will in many cases be worse, for wealthy people with less than € 222,500 of cash, for example). This means that your cash will still be taxed based on a deemed return in Box 3 vs the actual return in a Spaargeld BV. The deemed return on cash for 2023 is 0.36% (€ 3,600 per €1M). Given the rising interest rates on savings accounts, and the increase in the corporate rates (from 15% to 19% on the first € 200,000 for 2022), the tax in a Spaargeld BV will likely be higher than the tax in Box 3. I calculate the “break even” interest rate at around 0.3% (i.e. if your savings are earning 0.3% or less, the Spaargeld BV results in lower tax for 2023, if your savings are earning more than 0.3% your tax is lower in Box 3.
Here is an example using € 1M of assets, an interest rate of 1% on savings and the 2023 rates:
| Cash Balance | € 1,000,000 | |
| Interest Rate | 1.00% | |
| Rate | ||
| Cash in BV | ||
| Actual Income | € 10,000 | |
| Corporate Tax | 19% | € (1,900) |
| Retained Earnings | € 8,100 | |
| Dividend Tax | 26.9% | € (2,179) |
| Net | € 5,921 | |
| Cash in Box 3 | ||
| Assumed Return of 0.36% | 0.36% | € 3,600 |
| Tax (32%) | 32% | € 1,152 |
| Actual Income | € 10,000 | |
| Tax on deemed return | € (1,152) | |
| Net | € 8,848 | |
| Net Additional Cost (Benefit) in BV | € 2,927 |
So in this example, which to me seems very realistic, it looks like having your cash in the BV costs an additional € 2,927, in addition to the hassle and expense of having a corporate structure to hold the cash (with a BV you need to prepare annual accounts and a corporate tax return at a minimum, plus for US citizens Form 5471 or Form 8858). The unknown factors are what the “deemed” return will be for the future years and what the “actual” returns will be on savings accounts. Also note that as of 2026 the whole system will be changing and they will tax your actual interest income rather than using a deemed income, in which case the question is only if the tax on personal income is higher than the tax on coprorate income plus the dividend tax, all else being equal. Also of note is that in general individuals are able to get a higher interest rate on savings than a corporation can, furthering the argument to get the money out of a Spaargeld BV and hold it privately.