For years, one of the quieter advantages of moving to the Netherlands on the Expat Scheme, widely known as the 30% ruling, had nothing to do with salary. Expats on the scheme could choose to be treated as non-resident for two parts of Dutch income tax: box 2, which taxes substantial shareholdings, and box 3, which taxes savings and investments. A portfolio, a savings account or a second home in the country they came from could stay largely outside Dutch tax.
That option has already closed for newer arrivals, and for the last group that still has it, it ends with the 2026 tax return. From 1 January 2027, those expats will meet box 3 in full, at the moment the Dutch government is proposing to make box 3 more expensive for 2027 and to rebuild it from 2028.
What the Opt-Out Did
The rule sits in article 11 of the Dutch income tax implementing decree. Employees recruited from abroad under the Expat Scheme could choose, for the duration of the scheme, to have the rules for non-resident taxpayers applied to boxes 2 and 3. The Belastingdienst calls this partial foreign tax liability. The choice applies to a whole calendar year and can be made or revised as long as the assessment is not final.
The Belastingdienst's explanation is direct: if you opt for it, "you are then a non-resident taxpayer for your taxable income from substantial interests (Box 2) and your taxable income from savings and investments (Box 3). This can be advantageous for you as you will pay tax on a lower taxable income in Box 2 and Box 3."
In practice, a resident of the Netherlands is taxed in box 3 on savings and investments worldwide, while a non-resident is taxed only on certain Dutch assets. For an expat with most of their wealth in their home country, the difference could be most of the box 3 bill.
Who Loses It, and When
The Belastingdienst sets out the timetable in two sentences:
"As of your tax return 2025, you can no longer opt for partial foreign tax liability. If you used the Expat Scheme before 2024, you can still use the partial foreign tax liability until your tax return 2026 due to transitional law."
That divides expats into three groups:
| Group | Partial foreign tax liability |
|---|---|
| Expat Scheme first used in 2024 or later | Not available from the 2025 return |
| Expat Scheme used before 2024, still running | Available up to and including the 2026 return |
| Any expat, from 1 January 2027 | Not available |
One detail matters for the last year. The choice is made in the income tax return, and under article 11 it can be made or revised as long as the assessment is not final. For 2026, that means the option is still open when the return is filed in 2027, even though the 2027 tax year itself will no longer qualify. Expats in the second group who have not used the option before should check whether it would still lower their 2026 bill.
The second group is the one facing a change now. Because a scheme decision runs for up to five years, some expats who started in 2022 or 2023 will still be on the scheme in 2027 and beyond. Their salary treatment continues under the scheme's own rules, which the Brief covered in its comparison of Europe's impatriate regimes. Their box 2 and box 3 treatment, however, becomes that of an ordinary Dutch resident on 1 January 2027.
What Box 3 Looks Like for a Resident
Box 3 is calculated on what you own on 1 January. For 2026, the Belastingdienst's figures are a tax-free amount of €59,357 per person, a deemed return of 6.00% on investments and other assets, a provisional 1.28% on bank balances and 2.70% on debts above a threshold of €3,800, and a tax rate of 36%.
The categories matter for expats, because the Belastingdienst's lists include assets abroad by name. Bank balances count whether they are held "in Nederland" or "buiten Nederland". Investments and other assets include shares, bonds, crypto, a second home in the Netherlands or abroad, and property that is let.
A simple example shows the scale. An expat with €400,000 of shares and funds held in their home country, and nothing else, would have a deemed return of €24,000 on 2026 rules. After the tax-free amount, box 3 income comes to about €20,400 and the tax to roughly €7,350 a year. Under partial foreign tax liability, that portfolio was outside box 3. From 2027, it is inside.
For people who actually earn less than the deemed return, the Belastingdienst confirms that, following Supreme Court rulings, the actual return must be taxed if it is lower. That route requires evidence, which is why records of actual income and value changes matter more than ever for this group.
Why 2027 Is a Particularly Expensive Year to Arrive in Box 3
The timing is unfortunate for this group. In its letter of 29 September 2026, the cabinet chose to extend a realisation-based capital gains tax to all financial instruments in box 3 from 2028, and proposed to pay for it partly through box 3 itself. Among the measures for 2027:
A lower tax-free amount. The tax-free wealth in box 3 would return to the 2020 level of €30,846, about half the 2026 figure.
A higher deemed return on "other assets". The deemed return on other assets, which the letter says includes rental income and the benefit of own use of real estate, would rise by 1.5 percentage points.
Lower box 2 rate, tighter borrowing. The second-bracket rate in box 2 would fall by 1.8 points to 29.2% for four years, while borrowing from one's own company would be capped in steps down to €100,000.
These are proposals. The Senate's finance committee provisionally agreed on 13 October to the route, on conditions, and the amending bill still has to pass both chambers. But for an expat leaving partial foreign tax liability behind, the direction is clear: the first year inside box 3 may come with a smaller allowance than any year before it.
On the example above, halving the tax-free amount alone would raise box 3 income and the tax by several hundred euros. For expats who own a second home or a let property in their home country, the higher deemed return on other assets matters more.
Box 2: Expats Who Own a Company
Partial foreign tax liability also covered box 2, the box for income from a substantial interest, generally a shareholding of 5% or more in a company. Expats who kept a company in their home country could be treated as non-residents for that income. From 2027, dividends and gains from such a shareholding fall into Dutch box 2 as for any resident.
The proposed temporary cut in the box 2 rate softens that slightly. For a founder with a company abroad, the interaction between Dutch box 2, the company's home country and any tax treaty is a separate piece of work, and it is better done before 1 January than after.
What Affected Expats Can Sensibly Do Before 1 January
Confirm which group you are in. Check the start date on your Expat Scheme decision and whether you used partial foreign tax liability before 2024. The decision itself shows its end date.
Make a full list of assets as at 1 January 2027. Bank accounts abroad, brokerage accounts, crypto, property and company shares all need a value on the reference date. The Brief's piece on the paper trail that saves you explains why documentation built now is worth more than documentation rebuilt later.
Keep evidence of actual returns. If your real return is below the deemed return, the counter-evidence route can reduce the tax, but only with records of interest, dividends, costs and value changes.
Look at the home country side. Assets that were outside Dutch tax may now be taxed in the Netherlands and still be taxed where they are. Treaty relief and local rules decide the overlap, and they differ by country and by type of asset.
Do not restructure on the basis of a letter. The 2027 measures and the 2028 system are proposals. Selling assets, moving them into a company or changing residence in response should rest on enacted law and a full calculation. For those considering leaving the Netherlands instead, the Brief's overview of exit taxes covers the questions departure raises, and its review of EU countries with no wealth tax explains why box 3 already works like one.
A Benefit That Was Always Temporary
Partial foreign tax liability was a transitional comfort, not a permanent feature of moving to the Netherlands. It was built into a scheme that lasts at most five years, and Dutch transitional law sets its end. What makes 1 January 2027 notable is the overlap: the last expats with the opt-out lose it in the same year the government proposes to tighten box 3 and the year before it plans to rebuild the system from the ground up.
Work with Sebastian
If you work in the Netherlands under the Expat Scheme and hold savings, property or a company in another country, and want to know what your Dutch tax position looks like from 2027, that is the kind of cross-border question Sebastian works on with internationally mobile clients. Book a consultation.
