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Netherlands Tax: What Has Changed (and What Has Not)
The Netherlands has approved a major reform of its Box 3 regime (Dutch personal income tax on savings and investments) through the proposed Wet werkelijk rendement box 3 (Actual Return Box 3 Act). The bill passed the House of Representatives (Tweede Kamer) on 12 February 2026, but it is not yet enacted law and still requires Senate (Eerste Kamer) approval before it can enter into force. The policy direction is to move from the former deemed-return approach to taxation based on actual return, generally combining direct yield (e.g., interest/pidends) and value changes (including unrealised gains) via a wealth-accrual approach (vermogensaanwasbelasting) as the main rule, with specified exceptions. The government's stated target for commencement remains 1 January 2028, subject to the legislative process and implementation capacity.
Cyprus Holding Company: Why Portfolio Investors Use It
As an alternative taxation based on annual value movements rather than on disposal, many investors look to a Cyprus company – often structured as a Cyprus holding company – to hold a portfolio of investments for clear, long-established reasons. Cyprus does not tax portfolio investments based on annual market revaluations. Most importantly, gains from the disposal of "qualifying titles" are exempt from Cyprus corporation tax. Qualifying titles include shares, bonds, debentures, options and similar instruments, making Cyprus a commonly selected EU jurisdiction for holding listed securities, bond portfolios, and equity investment platforms through a Cyprus holding company. (This exemption is frequently the anchor feature for a Cyprus company used as a portfolio holding vehicle.). The Cyprus exemption on qualifying titles applies at the level of the Cyprus company, making it particularly suitable for structured portfolio holding.
Cyprus Crypto Tax: 8% Flat Rate on Disposal (Same-Year Loss Offset)
Cyprus has implemented a dedicated crypto taxation framework applying from 1 January 2026, under which profits from the disposal of crypto assets are taxed at a flat 8%. The approach is realisation-based (i.e., triggered on disposal events such as sale, exchange, or use in payment), not an annual valuation charge. Loss utilisation is intentionally tight: crypto losses may offset crypto gains only within the same tax year (no carry-forward).
How Funds Flow to the Shareholder: Non-Resident vs Cyprus Resident vs Non-Dom
A key reason a Cyprus holding company is used in international structures is pidend efficiency. pidends paid by a Cyprus company to non-Cyprus tax resident shareholders are not subject to Cyprus withholding tax, allowing profits to flow out without local withholding leakage. For Cyprus tax resident inpiduals, pidends are subject to 5% Special Defence Contribution (SDC) (for pidends out of profits earned from 1/1/2026, with transitional rules potentially applying to pre-2026 profits) and 2.65% General Healthcare System (GHS) contribution. Where the Cyprus tax resident inpidual qualifies as non-domiciled, the SDC on pidends does not apply, meaning pidends are not subject to the 5% SDC (while the GHS contribution position remains relevant in practice).
Why Cyprus Remains a Primary Jurisdiction (Including NID)
These features – exemption on qualifying titles, efficient pidend flows, and a clear crypto tax framework – are key drivers for selecting a Cyprus company. In addition, Cyprus provides further structural tools such as the Notional Interest Deduction (NID), which can enhance tax efficiency where a Cyprus company is capitalised with new equity, and Cyprus remains an EU and OECD-aligned jurisdiction commonly used for holding and investment structures.
Conclusion
The Netherlands tax direction under the proposed Box 3 reform is toward taxing actual returns at 36%, with annual inclusion of value changes (including unrealised gains) as the main rule, pending Senate approval and with a targeted start date of 1 January 2028. For investors considering relocation or restructuring, a Cyprus holding company can offer a predictable EU alternative: portfolio gains on qualifying titles exempt from corporation tax, crypto taxed at 8% on disposal with same-year loss offset, and efficient pidend distributions with no Cyprus withholding tax to non-residents.
If you are affected by the Netherlands tax changes and are considering a Cyprus company as part of a relocation or portfolio holding plan, we can assess your specific fact pattern (asset mix, residency position, distribution strategy, and substance needs) and map the most defensible structure. Now is the time to review structure before 2028 implementation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
