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.

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.

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 five 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.

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 bmp 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.

In addition to national taxes, every resident in the Netherlands has to pay local taxes as well. Every year your municipality sends you a tax form that covers your local tax contributions for the year.

If you rent a house

If you are renting a house, it is likely you have to pay two local taxes: household waste tax and water tax.

Household waste tax  (afvalstoffenheffing) is used for the collection and processing of your household waste

Water tax (waterschapsbelasting) is billed separately by the water board (hoogheemraadschap) in your area. It is used for cleaning water, sanitation and flood prevention.

If you own a house

If you own a house you have to pay afvalstoffenheffing and waterschapsbelasting too.

In addition you have to pay sewage tax (rioolheffing) and  property tax (OZB, onroerende zaak belasting).

The rioolheffing is used to pay for waste water and for rainwater that ends up in the sewer.

The OZB is a percentage of the value of your house and is used to maintain the local  infrastructure.