Tax in the Netherlands
Everyone who lives or works in the Netherlands or receives income while living in the country is liable to paying taxes in the Netherlands, unless they are here under a special tax regime. Like any country, direct taxation is an important source of revenue for the Dutch government and is collected by the Belastingdienst (Tax Office). In order to avoid double taxation, the Dutch government has signed tax treaties with a number of countries.
Since 2017 the Tax Authorities offer an English speaking telephone help line. This may be contacted by calling +31 (0)55 538 5385. Should you require further assistance, or cannot find the answer to your question, please contact the ACCESS Helpdesk, or refer to our Partners for someone to assist you.
Can you give me an overview of the Dutch tax system?
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.
What taxes will I have to pay in the Netherlands?
The various forms of direct taxation (for the individual) are:
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. For example for a person who has yet to reach retirement age in 2017 they will pay:
- 36.55% tax on the first €19,982 earned
- 40.80% tax from €19,982 to €33,791 earned
- 40.80% tax from €33,791 to €67,072 earned
- 52% tax on anything above €67,072 earned
Please note that wage tax and income tax rates changes annually. You can find the latest information on the belastingdienst (tax office) website.
You must pay inheritance tax if you are bequeathed 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.
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.
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.
What types of indirect taxes are there in the Netherlands?
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 6% 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
What dates does the tax year cover in the Netherlands and when do I need to provide a tax return?
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. For example, for the tax year 2018, a tax return should be submitted by 1 May 2019.
If you are not able to file your belastingaangifte before 1 May, you can request an extension.
How can I get help with my tax return?
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.
For those of you living in the The Hague area, ACCESS has a tax consultant as one of its partners. Please visit the Partners page here. Alternatively, 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.
How do I know if I must pay income tax?
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.
How do I submit my tax return?
You can get a paper tax form sent to you by contacting the Belastingdienst (Tax authorities) information line for residents on 055 538 5385 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.
The government is migrating to the use of online services to manage all direct taxation and social security matters. 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.
How is my income assessed?
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.
Can I claim any tax benefits against my declared income?
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 www.rijksoverheid.nl/themas/belastingen (in Dutch only).
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.
Do I need to file my tax return even if I stay for short time?
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.
What about my savings and investments? Do I have to transfer them to the Netherlands?
You can leave your savings and investments in your home country, but you have to inform the Dutch tax authorities about them when filling in your tax form. A holiday house or second dwelling in your home country will have to be declared too, but normally a double taxation deduction can be requested.
What is the 30% ruling and when do I qualify for this?
This is a tax allowance incentive for employees recruited from abroad who bring specific skills to the Netherlands. It acknowledges that additional expenses are incurred by expats (extraterritorial costs) in settling into a new country. If you come to work in the Netherlands and you are eligible for the 30% ruling, you can choose partial non-resident taxpayer status. When having partial non-resident taxpayer status, you are considered a non-resident taxpayer for part of the income tax.
If you opt for partial non-resident taxpayer status, your taxable income from a substantial interest (box 2) and your taxable income from savings and investments (box 3) will, for income tax purposes, be determined according to the regulations that apply to non-resident taxpayer status. In practice this means that you are exempt of these taxes, apart from in box 2 a Dutch shareholding and in box 3 Dutch real estate.
As well as the 30% ruling, you can also be given a tax-free allowance by your employer for extraterritorial costs associated with providing schooling for your children. However, the school fees must be for an international school or for an international department within an ordinary Dutch school (i.e. where the curriculum follows a foreign system or where the department is only accessible to children of seconded employees that are temporarily assigned to work for a another organisation or a different part of their employer). Applications (completed by both employer and employee) should be made to the Belastingdienst Limburg Kantoor Buitenland in Heerlen.
To receive the 30% ruling from the Belastingdienst (Tax authorities), you must comply with the following conditions:
- You have an employment relationship with a company or organisation in the Netherlands
- You have specific expertise that is either non-existent or where there is a scarcity of availability in the Dutch employment market
- You are deemed to possess that expertise if your salary (not including the tax-free allowance in the Netherlands) is at least €37,000 for 2017
- You are under the age of 30, in possession of a Master’s degree and your salary (not including the tax-free allowance in the Netherlands) is at least €28,125 in 2017
- You have a valid decision (ruling) which has been granted by the Belastingdienst after 1 January 2012. Please note that if you have previously lived or worked in the Netherlands, the maximum term of your decision is less than eight years
- You can make use of the 30% facility if, in the 24 months prior to your 1st day of work in the Netherlands, you work more than 150 kilometres in a straight line from the Dutch border
You can find the latest information in regards the 30% ruling requirements here.
There are exceptions to the 24-month term and for people with a certain academic qualifications. Therefore, it is advisable to either:
- Ask your tax advisor or employer for more information
- or contact the Tax authorities on the English speaking telephone help line on 0555 385 385 or from abroad on +31 (0) 555 385 385. The opening times are: Monday to Thursday: 08.00-20.00 hours and Friday: 08.00-17.00 hours
More information can be found on: www.denhaag.nl/en/moving-and-immigration/work/application-for-the-30-ruling.htm.
When does the 30% ruling end?
The end date of the 30% ruling is stated in the documented decision issued to you and is usually up to a maximum period of eight years. If you decide to leave your employer’s organisation before the end date, then the allowance ends on your last day of work. Your employer is not allowed to apply the 30% facility to income that you receive after your last working day.
Do I need to pay taxes if I bring my own vehicle to the Netherlands?
If you are not a Dutch resident, you may use your car, motorcycle, caravan or trailer in the Netherlands for up to three months without paying tax. If you want to use your car, motorcycle, caravan or trailer in the Netherlands for longer than three months, you must register your vehicle with the RDW (Dutch Road Transport Directorate) and submit a private motor vehicle and a bpm motorcycle tax declaration. Depending on your circumstances, you may be liable to pay belasting van personenauto’s en motorrijwielen – bpm (private motor vehicle and motorcycle tax) and its CO2 emissions efficiency.
What is the bpm?
If you buy a passenger car, motorcycle or delivery van in the Netherlands, or bring it to the Netherlands from abroad, you are liable to pay various taxes. One of these taxes is known as belasting van personenauto’s en motorrijwielen – bmp (private motor vehicle and motorcycle). If you buy a vehicle from a main dealer or importer, then bpm will usually already have been included in the purchase price for the vehicle.
If you bring your own vehicle to the Netherlands (importing it), you will be required to make a declaration and pay tax which is calculated on the value of the vehicle, its CO2 efficiency rating and the type of fuel that it uses. You may also be liable to pay customs duty and BTW (VAT), depending on how long you have owned the vehicle. You can gain an exemption from paying the bpm if you have lived in another country for at least one year and can prove that you have had the car in your possession for at least six months prior to moving to the Netherlands.
Please note that if you import your own vehicle, you cannot sell it within twelve months from the date of registration. If you do so, you will have to pay the tax which was exempted at the time you imported this car.