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Comment by quentindemetz | Hacker News Reader

It’s the same in the Netherlands. Instead of counting how much you earn from your capital, the tax administration estimates that you earn about 5% and taxes you on that (about 30% iirc).

But hey, if you make above their estimation, you don’t pay extra. But if you don’t invest, you still pay...

I really like how simple it makes the tax calculation (at least when you know how to value your assets).

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It has changed in NL. It used to be 1.2% (it used to be 30% of 4%, I believe, but it was a bit before my time) on the value of all your assets (so what you said), but now they have a progressive system because the assumption that you make 4% on your investments has changed, the 30% stayed the same. Their assumption changed to: if you have less money you have relatively more money on the bank.

The actual calculation is a mix from all the brackets. E.g. if you have 1 million euro, then 71.650 is taxed at 0.58%, the bulk at 1.33% and a bit at 1.68%.

The progression goes as follows (I'm too into this apparently, forgive me):

----- BRACKET 1 -----

Until € 71.650

You save: 67% @ ROI of 0.13%

You invest: 33% @ ROI of 5.6%

Average ROI: 1.935%

Taxed: 1.935 * .3 = 0.5805%

----- BRACKET 2 -----

from € 71.651 until € 989.736

You save: 21% @ ROI of 0.13%

You invest: 79% @ ROI of 5.6%

Average ROI: 4.451%

Taxed: 4.451 * .3 = 1.3353%

----- BRACKET 3 -----

From € 989.737 to infinity and beyond

You save: 0% @ ROI of 0.13%

You invest: 100% @ ROI of 5.6%

Average ROI: 1.935%

Taxed: 5.6 * .3 = 1.68%

Source (Google Translate works relatively well): https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/...

Can the Dutch Tax Authorities show me where I can with relative safety make 5% ? my 5 figure portfolio (uk) returns about 3.4% income.

Its also odd that if say you get a ten bagger and turn 5k into 50k for a 45k capital gain you don't pay tax on that capital gain.

It would make sense and be firer to tax income and capital gain different and on actuals.

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