Starting your own business or working as a freelancer comes with tax obligations. All businesses must pay corporate tax in the Netherlands. It’s important to understand the main types of taxes that businesses in the Netherlands have to pay, to avoid unexpected costs.
If you are self-employed in the Netherlands, you will have to pay some or all of the following types of corporate tax, depending on the type of business you run:
Known as BTW (belasting over de toegevoegde waarde) or omzetbelasting in Dutch, value-added tax is a form of turnover tax or sales tax that is added to most goods and services in the Netherlands. Almost all businesses in the Netherlands must charge VAT on the products or services they provide, no matter what legal form their business takes.
However, you can make use of the small business scheme (kleineondernemersregeling or KOR) to avoid charging VAT. This is possible if you meet the following requirements:
You can use this KOR tool (in Dutch) to check whether your business qualifies for the small business scheme. If you do, you can apply for the KOR scheme by completing the digital form Melding omzetbelasting kleineondernemersregeling on the Belastingdienst website. Once you qualify, your participation is usually valid for three years, unless your turnover in any year exceeds 20.000 euros, in which case you must inform the Belastingdienst immediately.
When you register your business with the Chamber of Commerce, the Belastingdienst will assess whether you are an entrepreneur for the purpose of VAT and let you know. If you are, you will receive a VAT identification number (btw-id) and a VAT tax number (omzetbelastingnummer).
The VAT identification number is composed of the letters NL, followed by 12 other characters. The digits are totally random. You must put your btw-id on all invoices you issue.
The VAT tax number uses either your Legal Entities and Partnerships Information Number (RSIN) or your BSN, followed by three characters between B01 and B00. You should use your VAT tax number in all correspondence with tax authorities in the Netherlands.
You are required to collect the VAT you receive from customers and transfer it to the Belastingdienst. At the same time, you can deduct any VAT you pay on goods and services that you buy as business expenses.
You pay your VAT by completing a VAT return (BTW aangifte) digitally. Depending on your circumstances, you may need to do this monthly, quarterly or annually - the Belastingdienst will let you know what applies to you.
Depending on the good or service, the VAT rate is either 9% or 21%. You can find a list of what the rates for different types of goods and services are on the Belastingdienst website.
Some things are exempt from VAT, including:
If you are a sole trader or a partner in a commercial partnership in the Netherlands, then you are required to pay income tax (inkomstenbelasting) on your business profits - similarly to how you pay income tax on your salary when you are working in the Netherlands.
To pay your income tax, you need to file a tax return before May 1 each year. You can do this online via the Belastingdienst website or authorise someone to do it on your behalf. Your income from your business is taxed as Box 1 income and is classified as your earnings minus any deductibles like business expenses. You can read more about income taxes in the Netherlands, including income tax rates, on our dedicated page.
As well as income tax, you will also need to pay a contribution to healthcare, known as the income-dependent contribution pursuant to the Health Care Insurance Act (Zvw). This is paid on top of your premium for your health insurance.
If you own a private limited company or a public limited company, then you will have to pay corporate income tax in the Netherlands (vennootschapsbelasting or vpb). If you own a foundation or an association, you may be exempt from paying corporate income tax, depending on your profits.
Corporate income tax is a tax on the taxable profit made by your company within a single financial year. You can reduce your taxable profit by offsetting losses from previous or future years.
The corporate tax rate for the Netherlands is as follows in 2023, 2024 and 2025:
Each year, at the start of the fiscal year, you will receive a provisional assessment for your corporate income tax, based on your earnings and deductions from previous years. You can ask for an adaptation of your assessment if you expect your figures to be different, to prevent you from significantly overpaying or underpaying.
Then, at the end of the fiscal year, you pay your corporate income tax by completing and filing a corporate income tax return for your company, or authorising someone to do this on your behalf. Corporate income tax returns are filed digitally with the Belastingdienst.
If you own a private or public limited company, and it is profitable, part of that profit can be distributed to shareholders. This is usually in the form of a dividend.
If you pay dividends, you must withhold some of the money as a dividend tax and transfer this to the Belastingdienst. This is done via a return for dividend tax, which must be filed within one month of the dividend being issued. The dividend tax rate is currently 15%.
If you receive a dividend and you live in the Netherlands, you can offset the dividend tax you paid against your income tax.
If your business employs staff in the Netherlands, then you must also deduct payroll tax from their monthly salaries. Payroll tax includes:
To do this, you may want to use payroll software or hire a payroll office, accountant, or financial advisor.
Finally, businesses - like households - in the Netherlands pay environmental taxes on their utilities - namely the tax on energy and on mains water. They may also be required to pay waste disposal charges.
Self-employed workers in the Netherlands are able to reduce their overall taxable income by deducting work-related expenses. This includes payments for:
Sorting out your business tax affairs can be difficult, especially if the system is unfamiliar to you and you don’t speak Dutch. To make things easier, you might consider consulting with a tax advisor to help you with your finances and make sure you remain compliant with Dutch tax law.
The Netherlands offers a number of tax incentives to businesses to help them reduce their taxable income and save money overall. You can find out more about these tax breaks and allowances on our tax breaks for new businesses page.