The most innovative element of the Netherlands Income Tax Act of 2001 (ITA 2001) is the special regime for the taxation of income from portfolio investment and savings, usually referred to as "Box 3". Under the ITA 2001, a presumed return to investment is taxed at a flat rate. In effect, this system is a net wealth tax: the presumptive return of 4%, taxed at a flat rate of 30%, implies that taxable net wealth is effectively taxed at a rate of 1.2%. This article first discusses the government's reasons for adopting this system of taxation and then offers an outline of the system, with reference to the related features of the ITA 2001. The article also undertakes an analysis of the system and its effects in practice.