Dutch tax system & Taxes in the Netherlands
Income tax in the Netherlands
If you are working in the Netherlands then you will need to pay tax on your income.
Employees have wage tax withheld from their salary by their employer, while self-employed people must calculate and pay their tax via the annual tax return (in addition to quarterly VAT tax payments).
Even though wage tax has already been withheld from your gross salary (as an advance levy on your income tax) it is usually still necessary to complete an annual income tax return to balance out the already-paid wage tax with other financial aspects like your partner’s income, a mortgage, other income sources or tax deductions such as study or health-care costs.
To download the (income) tax return programme visit the Belastingdienst. Note that the tax return programme is available for Macintosh, Windows and Linux.
Indirect taxes in the Netherlands
› Value added tax (VAT)
On the sale price (usually 21%).
› Taxes on legal transactions
On (almost) every refinancing, disposal, acquisition, restructuring or initial public offering.
› Excise duty (or excise tax)
On goods produced and / or sold within the Netherlands.
› Environmental tax
Includes taxes on energy, groundwater, tap water, waste and fuel.
› Consumption tax (non-alcoholic beverages)
On non-alcoholic and "ready-to-drink" beverages.
› Import duties
- Turnover tax: 21%, 0% to 6% of the estimated value of the goods.
- Customs duty: depends on the type of imported goods.
- Excise duty: on alcoholic drinks.
› Tax on passenger cars / motorcycles
On passenger cars / motorcycles / vans either individually or company registered.
› Motor vehicle tax
Depends on the type of vehicle (car, van, motorcycle, lorry etc.), weight and type of fuel. It falls under the environmental tax category.
› Tax on heavy goods vehicles
On lorries used solely for road transportation of goods (through motorways). The amount depends on the vehicle’s axles and its classification (EURO-0, EURO-1 and EURO-2).
› Air passenger tax
Originally introduced as an environmental tax with little or even no effect (purely economic measure). The Dutch government is about to abolish it.
Looking for tax advice? Check out our list of Dutch tax services & advisors in the Netherlands!
Wage tax in the Netherlands
Your tax contribution is deducted from your salary every month, and this is important for expats to keep in mind when discussing the contract terms. There is an essential difference between your gross salary and your actual net after tax income. The income calculator can be found here.
Below you can see how the tax brackets are defined in the Netherlands for persons younger than 65:
› 37% on the first 19.645 euros
› 42% on the next 13.718 euros (from 19.646 up to 33.363 euros)
› 42% on the next 22.628 euros (from 33.364 up to 55.991 euros)
› 52% from 55.992 euros and higher
Direct taxes in the Netherlands
› Divided withholding tax
On dividends distributed by Dutch tax-resident companies. Note that it is gradually abolished.
› Inheritance tax Act
- Inheritance tax: on wealth acquired by inheritance from an individual whose properties are in the Netherlands.
- Gift tax: on the value of anything accepted as a gift from a resident in the Netherlands.
- Transfer tax: on wealth acquired by inheritance from an individual whose last place of residence was not the Netherlands.
› Corporate income tax
Applies to companies that are established in the Netherlands and to those that receive income from the Netherlands but are not established here.
› "Games of chance" tax
On prizes more than 454 euros won in any game of chance.
Tax system changes in 2015
As of July 1, 2015, the Dutch tax office has increased the penalties for undeclared income. The penalty for voluntarily declaring hidden income, wealth or inheritance has risen from 30 to 60 per cent. Hidden income that is discovered by the Belastingdienst risks a fine of 300 per cent.