For those new to the Netherlands, the Dutch tax system can seem complicated. It is not helped by the fact that much of the online government information on tax is only provided in Dutch (the English pages are intended for non-resident taxpayers).

The Netherlands is a socially aware country and you can expect to pay a substantial proportion (up to 52%) of your salary in taxes. There are many other forms of direct and indirect taxation levied by the Dutch Government to raise revenue.

Direct taxation is applied to both individuals (who are either living, working or obtaining income in the Netherlands) and to commercial organisations.

The various forms of direct taxation (for the individual) are:

Income tax

This tax is deducted from your salary at the source and is also applied to other forms of earnings that you must declare. Income tax is a ‘tiered’ tax in that the percentage of tax taken relates to the size of your salary and is taken in steps. You can find the latest information on the belastingdienst (tax office) website.

Inheritance tax

You must pay inheritance tax if you are have inherited more than the exemption amount. The amount of money that you can inherit before having to pay tax is dependent upon your relationship with the deceased. In certain situations, you may not have to pay any inheritance tax.

Gift tax

You will be liable to pay tax on a gift you receive, if the value of the gift is over a certain amount in any one tax year.

Transfer tax

If you buy a house or other property, then you usually have to pay transfer tax. The transfer tax applies if you are the legal or beneficial owner of: property, rights in real estate, shares in immovable bodies (i.e. buildings).

It should be noted that your personal situation (non-working partner for example), type of work, residency status and other assets and earnings (particularly from abroad) will affect your position with respect to what taxes you must pay.

On top of the direct taxation for individuals, there are also various indirect taxes charged by the Dutch government. Below are some of the main taxes which are likely to affect you:

• Tax on the value of goods and services sold to you that is Btw-belasting toegevoegde waarde (VAT). This is levied at either 9% or 21% depending on the nature of the goods or services
• Excise duty is levied on goods which contain alcohol, tobacco or on fuels such as petrol, diesel or Liquefied Petroleum Gas (LPG)
• Consumer tax is applied to some alcohol-free drinks, for example: fruit juices and vegetable juices, mineral water and beverages such as lemonade
• Taxes on purchasing or importing private cars and motorcycles whilst living in the Netherlands

The tax year in the Netherlands runs from 1 January to 31 December inclusive. You are normally required to complete and submit your belastingaangifte (tax return) before 1 May following the end of the tax year.

In the first instance, especially if you are unfamiliar with the Dutch tax system and your ability to speak Dutch is limited, it may be advisable to employ a Dutch tax consultant who will be able to submit the tax return for you.

You can contact the ACCESS Helpdesk if you require help in locating a tax consultant in your area.

If you have any specific questions, you can also call the Belastingdienst (Tax Office) information line for residents on (055) 538 5385 or on +31 (0) 55 538 5385 if calling from outside the Netherlands. You may need to give your burgerservicenummer – BSN (citizen service number) when calling.

You can also visit your local Tax Office. However, this can only be done by making an appointment and usually requires you to contact them via telephone first. The location of your tax office can be found on: www.belastingdienst.nl/rekenhulpen/gvk.

If you have demonstrable ties to the Netherlands (for instance, you live here, you work here, and your family is based here), you are generally regarded as a ‘resident taxpayer’ from day one and therefore must pay inkomstenbelasting (income tax). If you live abroad but receive income that is taxable in the Netherlands, you are generally a ‘non-resident taxpayer’. Non-residents can also apply to be treated as residents for tax purposes (in order to gain access to the Dutch deductible items). An additional category of partial non-resident taxpayers covers those eligible for the so-called ‘30% ruling‘.

As a resident taxpayer, you are taxed on your income earned both in the Netherlands and abroad. Hence, you should always investigate if the Netherlands has a tax treaty with the country where you may be gaining an income to avoid double taxation, that is, being liable for tax on the same income or capital from more than one country.

You are normally required to submit an belastingaangifte (tax return) if you receive a declaration letter or form from the Dutch Tax Office. However, also in the situation that you do not receive a notification from the tax office and tax would be due, you are liable to submit a tax return. Even if not requested to do so, it may be advantageous to do a tax return as a refund may apply, for example if you can make use of some tax deductions.

The types of income are treated differently for tax purposes on the tax return and categorised on the tax return into one of three boxes:

Box 1 – Income from business profits, employment and home ownership

This includes wages, pensions, social benefits, benefits provided by the employer (such as the provision of a company car) and earnings from renting out a house.

Box 2 – Income from substantial shareholding of a company

You must hold at least 5% of the company’s shares.

Box 3 – Taxable income from savings and investments, e.g. interest earned and dividend payments

The amount of tax payable is calculated by applying the various tax rates to the various taxable incomes in the boxes. The amount calculated is then reduced by one or more tax credits. For more information click here.

Everyone is entitled to a general tax credit. However, the amount that you will be entitled to is dependent upon your age. It should be noted that there is a larger decrease in general tax credit entitlement for those who are at the top income tax tier.

You may be entitled to other credits which will either be part of the income tax assessment or come under social security. In general, people who are not covered by the Dutch social security system are not entitled to the social security section of the tax credit. Examples of tax credits are:

• Salary/wage from employment
• Work bonus
• Income-related combination tax
• Single parent tax credit
• Parental discount
• Tax credits for AOW (state pension) beneficiaries
• Temporary tax credit for early retirees
• Young disabled discount
• Discount for green investments

Your employer will take the general tax credit into account when deducting wage withholding tax but not any other personal circumstances. You can claim other allowances and potential refunds when you file your tax return or request a provisional refund.

Where possible, partners are taxed individually but, when only one partner works, the other partner is generally entitled to a refund of general tax credit and deductible expenditure can be apportioned to take advantage of tax credits.

Details of income tax deductions and entitlements are provided (in Dutch only) on the Belastingdienst (Tax authorities) on Belastingdienst.nl and general information on taxes can be found on government.nl/topics/income-tax/types-of-income-tax.

We would always recommend that you seek professional advice to get the appropriate guidance depending on your personal situation. If you need a list of tax and financial advisors in your area, please contact the ACCESS Helpdesk here or check the Partner page.

As a general rule you must file your tax return if you receive an invitation from the Belastingdienst (Tax authorities). Therefore, it is not obligatory if you have been registered in the Netherlands only part of the fiscal year (1 January to 31 December inclusive).

The most common form to use is the ‘M form’ for those who arrived in the Netherlands and became a resident during the year. This cannot be filed in electronically with your DigiD. Therefore, if you did not receive an invitation but you still want to file your tax return, you will have to request to the Tax authorities to post it to you. More general information on the Dutch income tax system for non-residents is available on Belastingdienst.nl. The non-residential information pages are provided in both English and German.

You can get a paper tax form sent to you by contacting the Belastingdienst (Tax authorities) information line for residents on  (055) 538 53 85 or on 0031 55 538 5385 if calling from outside the Netherlands. Alternatively, you can download the form from the Belastingdienst (Tax authorities) website on www.belastingdienst.nl.

To file a return, you will need to use the online DigiD service. DigiD (pronounced ‘didjidee’) stands for digital identity. It is a system shared by government agencies that they can use to verify your identity. You can find more information here.

If you find the whole process of providing a tax return too challenging, you can pay for a Dutch tax consultant to complete and return your tax declaration on your behalf.

Particularly in the year of arrival and the year of departure, filing a tax return may result in a substantial rebate. Tax returns can be completed retrospectively for a period of five years.