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The Dutch tax reform of January 1, 2001 replaced the progressive personal income tax on dividend, interest and rental payments by a presumptive capital income tax on the value of the assets net of liabilities. The tax code assumes that personally held assets earn a return of 4%, which is taxed at a proportional tax rate of 30%. Actual capital income is no longer relevant under the presumptive capital income tax. This paper discusses and analyses the Dutch capital income tax system after the tax reform of January 1, 2001. Further tax reform policies that might resolve the remaining capital income tax distortions (the Allowance for Corporate Equity (ACE) and the Allowance for Shareholder Equity (ASE) tax system) are also discussed.JEL codes: H2, H3.