Avoid Box 3 tax and move to a BV? That will probably one of the frequently asked questions now the assumed yield for coming year (2026) is set at 7,78% over which you pay 36% Box 3 tax.
Avoid Box 3 tax and move to a BV?
The announced rates for 2026 are set for Box 3 at an assumed yield of 7,78% for the assets exceeding the threshold, excluding money in savings accounts. The tax rate is 36% tax, that implies over every EUR 100.000 investment over the threshold amount you pay EUR 2.800 in tax.
Hence the questions: Avoid Box 3 tax and move to a BV?
Please accept that this question is actually a financial advice question. And the Dutch authorities are very clear in who can provide financial advice: those who are authorized. We are not authorized, nor do we have the knowledge about financial advice.
This article is to share how it is to move your assets to the BV
The BV company is incorporated by the notary. Then the BV company is registered with the Chamber of Commerce. The Chamber of Commerce announces the BV with the Dutch tax office. The Dutch tax office will connect with you to inquire if you run a business in the BV or that it is a pure holding BV.
The notary and share capital
The notary set with you a share capital and that is a rather crucial part of your move to the BV. If you set up a BV with EUR 1 share capital, as that is conveniently low. In that case you have misunderstood the entire set up of the BV company to avoid Box 3 taxation. As any money you move from your private accounts to your BV accounts are loaned by you. In other words, you have a receivable on your BV which is not solving your issues.
Basically you loan your assets to a BV with no track record. No sound thinking investor would provide assets to a new BV company, you only do that as you are also the shareholder. The interest rate is therefore significant higher on this loan. The interest paid on a shareholders loan is taxed in Box 1 at the progressive rate. You made your Box 3 issues a Box 1 issue that is potentially worse.
The share capital needs to be set at the asset amount you like to move into the BV. For instance EUR 1 million. Then you need to create with your asset manager that the assets are transferred to the BV without actually being sold, as then you lose your position in the market. If done correctly, you have moved your assets from Box 3 to Box 2.
What is the main difference in Box 2?
The main difference in Box 2 is that you are not taxed over the value of your BV. The Box 2 rates, which are roughly between 26% and 32%, but change every year. These rates only apply if you paid yourself a dividend or sold (some of) the shares. The difference between purchase value or incorporation value and value of sale is taxed in Box 2.
Box 2 has 2 tax brackets, the lower percentage or first tax bracket and the other one. The result is first taxed in the lower bracket, and the balance is taxed in the higher bracket.
If you are a Warren Buffet follower, you never sell, then you also do not experience a Box 2 taxation. That is the difference with Box 3. In Box 3 whether your sell or not, the market value as per January 1 is taxed. In Box 2 the dividend or sale outcome of the shares is taxed. If you do not sell, pay no dividend, no tax is to be paid.
What happens if I get cold feet?
The moment you get cold feet, read: you want to move out of the BV as you misunderstood, you made a mistake. In that case you can unwind the set up and the share capital, the value of the asset deposit, is paid back to the shareholder tax free. The value change from the moment of depositing the share capital is still subject to tax.
Accounting obligations
You moved to avoid Box 3 tax into the BV. However, now you need the services of an accountant, and these are not for free, you soon learn.
The BV company has the obligation to publish an annual report. If that is not done in time, the director of the BV is held liable personally in case of bankruptcy. As this is about your assets, you are the director and financial markets can be volatile, please publish the annual report in time.
In order to be able to publish the annual report, the bookkeeping needs to be done. And now the accountant nightmare starts. Every single transaction is to be monitored. Example, you purchase shares Heineken on March 1 and then again on July 15. In September you sold some of Heineken shares, but which one did you sell? The one purchased in March or in July? This is one share, but you have a portfolio full that need this attention.
At the end of the year the BV needs to file a corporate income tax return, based on the commercial annual report. However, in the corporate income tax return no corporate tax needs to be paid over an unrealized gain. The commercial annual report will show on the balance at the end of the year the value of the shares at the stock market as per December 31. However, if you purchase and not sold your March and July Heineken shares. These shares are fiscally reported for the purchase value instead of market value as per December 31. You have fiscal values and commercial values.
Hence you have severe accounting obligations at the costs of the accountant.
What if you move abroad?
This article is written in English, our clients are internationals, hence it is likely one day you will move out of the Netherlands. I would, with this tax system, but I am a native Dutch Amsterdam guy that never leaves.
You incorporated a BV, with the fiscal corporate income tax return you have not yet paid over any of the capital gains, as you are a Warren Buffet follower: never sell. How convenient it is to move to a country with a truly low corporate tax rate.
The BV will always has a Dutch corporate filing obligation based on the fact it is a Dutch BV. But the moment the company physically moves abroad, the actual corporate income tax obligation is abroad. A nil return is filed in the Netherlands.
When does a company move abroad?
The substance of a company is determined by the director human being of that company. If the director moves its tax residence, the company moves with the director. Hence the day the director moves its tax residence to the United Kingdom, or France, the Dutch BV company moves with the director.
I have no idea about the corporate tax rates in the United Kingdom or France, but the Dutch Government knows they will not let slip to tax the buildup value in the Dutch BV company. Hence there exists an exit tax.
Exit tax
The corporate income tax knows an exit tax, where the unrealized gains and the buildup profit reserve is determined. An assessment is imposed for that value to be paid at any moment the shares are sold, BV is liquidated, or share are put up for usufruct.
Tax is exciting
We think tax is exciting. Some are excited to avoid Box 3 tax by incorporating the BV and sharing with friends and family how smart they are. But are they? I hope to have shared above what is involved. I cannot bore you too much, as what happens if the shareholder dies. Or if the markets collapse. Or the tax office challenges the valuations used in the corporate income tax returns.
Then the costs involved of the notary, the accountant, tax advisor. And all of them cannot provide you with financial advice, for that you need to consult your financial advisor. This article is meant to give you an indication of what is involved. An indicative article.
I think the above setup is for the happy few that have extensive assets. But if that is the case, why stay in the Netherlands? Is it not more convenient to choose a country in the world where your assets are taxed less? Indeed, live is sometimes more than tax rates only. Some enjoy the schooling system, the freedom in the Netherlands or even the directness! Than the Box 3 tax is the price of an enjoyable life.
