Tax & Deductions

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

Updated: 2026-05-27 Tax Boxes Income Tax 2026

Dutch income tax is organised into three "boxes", each with its own rules and rates. Understanding which income lands in which box is essential for any entrepreneur, especially BV (besloten vennootschap, the Dutch private limited company) owners. This guide walks you through all three boxes for 2026.

The idea behind the boxes

The Netherlands taxes different types of income separately, in three boxes. Income in one box stays walled off from losses in another. Each box has its own rate.

Box 1: income from work and home

This is the biggest box for most people. It includes salary, sole-trader business profit, and the deemed benefit of owning your home. Rates in 2026 are 35.75% up to €38,883, 37.56% up to €78,426, and 49.5% above that.

A sole trader's profit and a DGA's salary both sit here.

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: 24.5% up to €68,843 per person, and 31% above that. This is the box that matters when you pay yourself a dividend from your BV.

Box 3: savings and investments

Box 3 taxes your private wealth: savings, investments and second properties, above a tax-free amount (€59,357 per person in 2026). Instead of taxing real returns, it taxes a deemed return. The rate in 2026 is 36% on that deemed return. Note that the Box 3 system has been under reform, so details shift year to year.

Why this matters for entrepreneurs

As a BV owner, your salary is Box 1, your dividends are Box 2, and your private savings are Box 3. Smart planning often means balancing salary (Box 1) against dividends (Box 2), and considering whether to invest privately (Box 3) or through your BV (corporate tax).

Deeper reading: how the savings BV works and what the move to actual returns in box 3 (2028) means for your planning.

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. Rates rise in brackets; tax credits lower the effective burden on modest incomes.
Box 2: The box for income from a substantial interest: dividend and capital gains on a shareholding of five percent or more. Two brackets apply; the first bracket runs per person, which rewards spreading over years and partners.
Box 3: The box for income from savings and investments. Tax runs over a deemed return above the tax-free allowance; the Actual Returns Act is scheduled to replace the deemed-return system.

All terms in the glossary →

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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, then 31%.

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

The boxes are separate. A loss in one box leaves income in another untouched.

Is investing through my BV better than Box 3? +

It depends. BV investments are taxed via corporate tax (19%) rather than the Box 3 deemed-return system. For larger amounts, investing through a holding is often more efficient, but get tailored advice.

Sources Belastingdienst · KVK · wetten.overheid.nl Last updated: 2026-05-27