The Dutch personal income tax is a direct tax levied by way of assessment on the ‘income’ of private individuals. Personal income tax for private individuals consists out of three elements (so called tax ‘boxes’):
- Box 1
the tax on the taxable income from work and home;
- Box 2
the tax on the taxable income from a substantial interest; and
- Box 3
the tax on the taxable income from savings and investments.
Each of the aforementioned three categories of income is also referred to by the term ‘box’, so that one speaks of successively boxes 1, 2 and 3.