The personal income tax, considered to be the cornerstone of the tax system of the Netherlands, has changed significantly in the last decade. Until 2001, the personal income tax was based on worldwide income, i.e. all income was added together and the total was taxed using one tax rate structure. At the beginning of the new millennium, the government implemented a new income tax which contains elements of a schedular system with different tax rates and exemptions for different types of income. This article examines the three boxes in the new income tax: Box 1, applicable to income from work and home ownership; Box 2, applicable to income from a substantial interest and capital gains from the disposition of such an interest; and Box 3, applicable to income from capital. The article also discusses the tax treatment of non-residents.