Tax & Deductions

Box 1, 2 and 3 Explained for Entrepreneurs in the Netherlands

Updated: 6 October 2026 Holdwise editorial team Tax Boxes Income Tax 2026

Dutch income tax is split into three "boxes". Each box has its own rules and its own rates for 2026. As an entrepreneur, you need to know which income belongs in which box. This is most important if you own a BV (besloten vennootschap, the Dutch private limited company). At Holdwise, we updated this answer on 30 September 2026 and change it when the rules change.

The idea behind the boxes

The Netherlands taxes different kinds of income separately, in three boxes. Each box has its own rate. You can set a loss in one box only against income in that same box.

Box 1: income from work and home

For most people this is the largest box. Salary, the profit of a sole trader and the deemed benefit of owning your own home are taxed here. The 2026 rates are 35.75% up to €38,883, 37.56% up to €78,426 and 49.5% above that.

The profit of a sole trader is taxed here, and so is the salary of a DGA. A DGA is a director-major shareholder, the owner who is also the director of the company.

Box 2: substantial shareholding

Box 2 applies if you own 5% or more of a company, such as your own BV. Dividends and gains on those shares are taxed here. In 2026 the rate is 24.5% up to €68,843 per person and 31% above that. This is the box you deal with when you pay yourself a dividend from your BV.

Box 3: savings and investments

In Box 3 you pay tax on your private wealth: savings, investments and second properties. In 2026 a tax-free amount of €59,357 per person applies. The tax is 36% of a deemed return set by law. If your actual return is lower, you can show that and pay tax on the actual return instead. The government is reforming the Box 3 system, so the details change from year to year.

What this means for entrepreneurs

As a BV owner, your salary is taxed in Box 1, your dividends in Box 2 and your private savings in Box 3. In your planning, you usually weigh salary in Box 1 against dividend in Box 2. You also decide whether to invest privately in Box 3 or through your BV, where corporate tax applies.

See how a savings BV works, and what the planned change to box 3 from 2028 means for your planning.

The rates are the same for everyone. The result for you depends on how your company is set up. You can have your structure checked against the 2027 figures in a written structure review.

Have a look at Corporate Tax Explained and Income Tax for Entrepreneurs in the Netherlands (2026).

Terms on this page

Box 1: The Dutch income tax box for income from work and home: salary, business profit and the owner-occupied house. The rate rises in brackets. With tax credits, people with lower incomes pay less tax.
Box 2: The box for income from a substantial interest: dividend and capital gains on a shareholding of five percent or more. There are two brackets. The first bracket applies per person. You can save tax by spreading income over several years and between partners.
Box 3: The box for income from savings and investments. Tax is charged on a deemed return above the tax-free allowance. The cabinet wants to tax gains on investments only when you sell, from 2028. This is in a letter to parliament of 29 September 2026 and is still a proposal.

All terms in the glossary →

Free advice

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Part of Doing Business in the Netherlands, the complete 2026 guide.

Frequently asked questions

Which box is my dividend taxed in? +

Box 2, if you own 5% or more of the company. In 2026 the rate is 24.5% up to €68,843 per person and 31% above that.

Can I offset a loss in one box against income in another? +

The boxes are separate from each other, so you can offset a loss only against income in the same box.

Is investing through my BV better than Box 3? +

It depends. Investments in a BV fall under corporate tax (19% on the first €200,000 of profit and 25.8% above), and they fall outside the Box 3 deemed-return system. For larger amounts a holding company is often cheaper. Ask an adviser to work it out for your own figures.

Sources Belastingdienst · KVK · wetten.overheid.nl Last updated: 6 October 2026