Dutch Tax Boxes Explained for Newcomers

Box 1: Work and Home

Box 1 covers income from employment, self-employment, pensions, and the notional rental value of a home you own and live in. This is the bracket most expats interact with first, since salary is taxed here through payroll.

For 2026, income up to 38,883 euros is taxed at 8.10 percent in income tax, with national insurance contributions adding significantly more within that bracket. Income between 38,883 and 78,426 euros is taxed at 37.56 percent, and anything above that at 49.50 percent. Highly skilled migrants on the 30 percent ruling, which exempts a portion of salary from tax for a set period, also file within Box 1, just with a reduced taxable base.

Box 2: Substantial Business Ownership

Box 2 applies if you own 5 percent or more of the shares in a company, whether that company is in the Netherlands or abroad. This matters enormously for immigrant entrepreneurs and startup founders, since it is a completely different regime from Box 3.

Dividends and gains from selling shares in Box 2 are taxed at 24.5 percent on the first 68,843 euros and 31 percent above that, but only when the income is actually realized, meaning paid out or sold. A founder whose company is valued highly on paper but who has not sold or received dividends owes nothing under Box 2. This is the bucket that protects most startup founders from the unrealized gains tax discussed in Box 3.

Box 3: Savings and Investments

Box 3 is where savings accounts, stocks below the 5 percent threshold, ETFs, bonds, second properties, and cryptocurrency are taxed. Until now, the Belastingdienst applied an assumed rate of return regardless of actual performance, a method courts repeatedly ruled unfair. From January 1, 2028, pending Senate approval, this shifts to taxing actual annual value changes on liquid assets like stocks and crypto at 36 percent, with the first 1,800 euros per person exempt, while real estate and qualifying startup shares below the Box 2 threshold are taxed only when sold.

What This Means If You Are New Here

For most newcomers earning a salary, Box 1 is the only box that matters day to day. The conversation about unrealized gains primarily concerns people holding investment portfolios, crypto, or second homes inside Box 3, not employees or founders with controlling stakes. Immigrants planning to invest after settling in the Netherlands should track where their assets sit across these three boxes before 2028, since the same euro can be taxed very differently depending on whether it sits in a salary, a majority-owned company, or a brokerage account.

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