Netherlands Box 3 tax on annuities: why your US annuity still counts as savings

Written by Hans Goldstein, licensed insurance agent · CA 4273294
Updated October 2026

How Box 3 works in 2026

The Netherlands has no wealth tax in name, but Box 3 behaves much like one. Instead of taxing what your investments actually earned, the Belastingdienst assumes a return on what you own on 1 January, and taxes that assumed return. For 2026:

Put simply: €100,000 of investments above the allowance is deemed to earn €6,000, and you pay 36% of that, €2,160 a year, whatever it really earned. The same €100,000 in a bank account is deemed to earn €1,280, so €461 of tax.

Where a US annuity lands: Box 3, not Box 1

Dutch tax splits annuities by how the premium was paid. Premiums that were deducted from Dutch income buy a lijfrente, and those payments are taxed in Box 1 (Income Tax Act 2001, art. 3.100). A US single premium immediate annuity bought with your own after-tax savings before you move was never deducted in the Netherlands. Read together, articles 3.100, 3.101 and 5.3 of the Income Tax Act 2001 place it in Box 3 as a right to periodic payments (recht op periodieke uitkeringen), an “other asset” at its economic value.

That has one helpful effect: on my reading of the statute the monthly payments themselves are not taxed again in Box 1, because Box 3 already taxes the right. It is my reading, not a published ruling, so ask a Dutch tax adviser to confirm it for your contract. The annuity is then a Box 3 asset like a portfolio, and it sits in the 6% category, not the bank category.

How the annuity is valued: payment times an age factor

The value of a right to lifetime payments is set by article 19 of the Uitvoeringsbesluit inkomstenbelasting 2001: the yearly payment times a factor based on the annuitant’s age on 1 January. A woman is valued as a man five years younger, and a joint and survivor annuity as a man ten years younger than the younger spouse.

The value steps down as you age, even though the payment does not change. That is the quiet advantage of the annuity in Box 3: the asset shrinks on paper while it keeps paying you the same amount.

Example: €427,000 three ways

A 65-year-old man puts $500,000 (about €427,000 at $1.17 per euro, a planning rate) into a life-only SPIA. Using the ImmediateAnnuities.com survey of September 9, 2026 ($639 a month per $100,000 at 65, average), it pays about €32,800 a year. Illustrative, not a quote. Here is the Box 3 picture before the allowance:

So against an investment portfolio the annuity lowers Box 3 tax, by about €2,850 a year at 65 and more at 70 and 75 as the factor drops. Against cash in the bank it raises it, by about €4,400 a year, because the bank category is deemed to earn so little. The honest summary: a US annuity is not a Box 3 escape. It is a way to turn savings into lifetime income that Box 3 values below the premium.

Who this matters for

The people who write to me about the Netherlands are usually a Dutch-American couple: one partner grew up there, the other is American, and after decades in the US they want to retire near family. They often have a solid portfolio and a house, and very little Dutch income on paper. Box 3 will tax that portfolio every year on a 6% assumed return whether markets cooperate or not. Turning part of it into a lifetime annuity does three things at once: it creates the steady income a family permit looks for, it lowers the Box 3 value of that money compared with keeping it invested, and the Box 3 value keeps falling at 70 and 75 while the payment stays the same. It does not make the money disappear from Box 3, and that is the honest line I draw for every couple.

Two choices change the numbers. A joint and survivor annuity is valued as a man ten years younger than the younger spouse, so it carries a higher factor and a higher Box 3 value than a single-life contract. And because the factor resets by age band on 1 January, the timing of the purchase around a birthday can move the first year’s value.

The income side and the permit

The reason most Americans look at an annuity for the Netherlands is not tax but the permit. There is no Dutch retirement visa; the realistic route is family reunification with a Dutch partner as sponsor, and the IND tests the sponsor’s income, not savings. A lifetime annuity paying the Dutch partner can create that income. The full IND rules, the 2026 amounts and the AOW-age exemption are on the Netherlands income requirement guide.

Box 3 itself is being rebuilt. The lower house passed the actual-return law (Wet werkelijk rendement box 3) on 12 February 2026, aimed at 1 January 2028, so treat the deemed-return figures here as the 2026 picture. You can also ask about the option to report a lower actual return (Income Tax Act art. 5.25) for an annuity right whose value falls each year.

The US side

As a US citizen you stay taxable on worldwide income. A SPIA bought with after-tax money is taxed under IRC 72 with an exclusion ratio, so part of each payment is a tax-free return of premium. Since January 1, 2026, a US citizen with a foreign residence address cannot opt out of federal withholding even with a US bank account (Treas. Reg. 31.3405(e)-1); withholding is a prepayment, not extra tax. A US annuity is not reported on FBAR or Form 8938 and is not a PFIC. Box 3 tax is a tax on a deemed return, so ask your US preparer how much of it, if any, is creditable against US tax on the annuity.

The trade-offs, once: the annuity is irrevocable, level unless you add a cost-of-living rider, paid in dollars against euro costs, and backed by the issuing insurer’s claims-paying ability. Buy it while you still live in the US, and size it to the income the IND needs, not your whole net worth.

Frequently asked questions

Related reading

• Moving abroad on a fixed income: hub
• Moving to Norway: my parents' story
• Netherlands income requirement and Box 3
• Wealth tax countries and annuities
• Spain wealth tax and annuities
• Swiss annuity tax reform 2025
• How European countries tax a US annuity

Sources

• Belastingdienst: Box 3 calculation 2026 (1.28%, 6.00%, 36%, EUR 59,357)
• Belastingdienst: Bezittingen en schulden (box 3), 2026
• Wet inkomstenbelasting 2001, arts. 3.100, 3.101, 5.3, 5.25
• Uitvoeringsbesluit inkomstenbelasting 2001, art. 19 (value of periodic payments)
• Rijksoverheid: timeline actual-return Box 3
• IND: Required amounts income requirements
• US-Netherlands income tax treaty (IRS text)
• Treas. Reg. 31.3405(e)-1 (withholding for payees with a foreign address)
• ImmediateAnnuities.com: immediate annuity rates by age (survey of September 9, 2026)