I'm not sure why this is suddenly news. As far as I'm aware from my immigration inquiries, the Netherlands has had a "Box 3" unrealized capital gains tax for many years. This merely looks like an adjustment/improvement of the existing system, not some radical new policy.
Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3
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Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3
#82I'm not sure why this is suddenly news. As far as I'm aware from my immigration inquiries, the Netherlands has had a "Box 3" unrealized capital gains tax for many years. This merely looks like an adjustment/improvement of the existing system, not some radical new policy.
They had essentially a wealth tax in Box 3 - your investments/savings are deemed to have a fixed fictional yield on which you pay income tax. Currently, 6.17% yield x 32% tax = 2% wealth tax. Hurts just a little bit, but it's a smooth, predictable cash flow.
They are replacing it with a much worse and untested economic policy - taxing unrealized capital gains every year. Not a big deal for relatively stable assets (real estate etc), but can explode in your face if you're into any risky volatile stuff (stocks, options, crypto) - they can crash next year, but your tax bill won't. Lack of liquidity can get you as well - you may have huge gains on paper, but for various reasons unable to sell in a reasonable timeframe and come up with equally huge amount of cash for the tax office - we're talking probably 30-50% tax here vs 2% under the old system. Double taxation if you have US passport - you're going to have to please both tax systems or pay double the tax.
The outcome I'd guess would be an exodus of the rich / upper middle class, and then they either scrap it or tighten further with exit taxes. Oh and they're also scrapping the coveted "30% ruling" for expats. Probably can forget about ever being able to FIRE in Netherlands.
Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3
#83[flagged]
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Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3
#84Why don't governments take a portion of the stock as tax payment? They can cash it in (or not), but if all your money is in stocks, are they forcing you to sell the stock to pay them? i.e.: The tax shouldn't be in numerated in currency but stock. If it is currency, you are forced to measure a portion of the stock based on its current value and sell that much stock, if they take a fixed percent of the stock that amoun…
Because within a few decades this would literally turn the Netherlands into the USSR. Compounding, but in reverse, away from individuals and into the inefficient state to manage and run all businesses.
I know we have a lot of communists in Europe (and on HN) who want to run that stupid experiment again, but even in Europe it’s a fringe view.
Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3
#85Countries that continue with fiscal plunder will only see those who can afford it flee, and after some time, popular uprisings from people who are fed up with Agenda2030 and still haven't figured out how to say no democratically.
If some populations do this, as recently happened in Switzerland, they will likely avoid uprisings.
Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3
#86So can you get unrealized capital losses to turn into tax credits? And can a person build up these credits to use in different years? If not, this is just a big tax increase to support continued government inefficiency instead of fixing spending and efficiency problems.
Yes, losses can be carried forward indefinitely:
> Losses within box 3 can be carried forward indefinitely and offset against future box 3 income. However, losses cannot be offset against income in other tax boxes in the Dutch personal income tax. To avoid administrative burdens, a minimum threshold of € 500 applies before a loss can be officially recognized.
https://www.loyensloeff.com/insights/news--events/news/legis...
Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3
#87To summarize the current Dutch personal income system: besides income from salary and income from own business (these are taxed quite high), income from investments (stocks, passive investments, real estate excluding your first home) is taxed quite low. The amount is simply a percentage based on the value (as per the start of the year) of your investments. So in the Dutch tax system there is no difference between rea…
One important thing the article omits is that there is threshold under which you don't pay anything in box 3. If you own less than 57.000 eur (or 114k for a family) you don't pay this tax.
Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3
#88Earlier quoted context omitted.
That's not a tax, that's the expense ratio, which is basically describing fees captured by the fund manager. Funds accessible to Dutch investors involve similar ERs. It's not an alternative.
Yes, the tax can be thought of an extra expense ratio. Same impact on you, at the end of the day.
It can be thought of the same way, but not from the perspective that's under discussion. As such it doesn't really add anything except a new perspective. Why are you introducing it, what does it add?
Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3
#89Earlier quoted context omitted.
> I'm not aware of any other country that taxes them like that (besides wealth/exit taxes), so maybe they're the world's first here! Real estate taxes. > not the yearly increase in wealth. Real estate taxes.
For real estate, yes, but it's a quite different type of asset with a stable value that (mostly) only goes up. What about stocks or crypto (the assets this new law targets)? They can have wild value fluctuations in a year. If your crypto or startup's options have +1M paper gain this year and turn worthless the next year, is it fair to ask people to cough up some 300-500k of real cash in tax?
Maybe? You can deduct losses.
If you have to sell a little of your crypto while the price is high to pay your taxes, then what have you lost after it goes to zero? At least the tax office get something out of it in tat case.
Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3
#90I don't get how this works in practice. I am not wealthy, I don't even own an house. But I have a decent salary and buy some stocks occasionally.
Most of my stocks are kinda volatile, so by paying taxes on unrealized gain I am taking much higher risk for owning them every year I don't sell. I would literally be paying taxes on money I don't own yet and could easily lose at the first mayor market upset.