The Dutch House of Representatives on Thursday voted to pass the Actual Return in Box 3 Act (Wet werkelijk rendement box 3), a reform that will tax residents at a flat rate of 36% on the actual returns they earn from savings and investments, effective January 1, 2028. 

The bill replaces a system that taxed investment income based on assumed returns, a framework the Dutch Supreme Court ruled unconstitutional in a series of decisions beginning in December 2021.

Under the new regime, the tax applies not only to income that has actually been received, such as interest, dividends, and rent, but also to the annual increase in value of assets like stocks, bonds, and cryptocurrencies, even when those assets have not been sold. 

If a…