The government of the Netherlands gets most of its revenue from taxes. The Ministry of Finance (Ministerie van Financiën) is responsible for the implementation of national tax legislation, whilst the Belastingdienst takes care of the actual execution of the legislation. If you earn money whilst living in the Netherlands, you are required to pay taxes.
A short history of taxes in the Netherlands
People in the Netherlands have been paying taxes for centuries. In the 18th century, the Dutch government was assured of income by taxing necessary goods like firewood, soap, salt, grain, meat, wine, peat, coal and wool. Back then, people paid the same amount of taxes, no matter their income.
In 1806, Alexander Gogel, Minister of Finance at the time, introduced a system of general taxes. It wasn’t until 1914 that income tax (inkomstenbelasting) was introduced. The purpose of this tax is to tax people according to their income. The more money you make, the more tax you have to pay.
In 1934, the Netherlands introduced a sales tax (omzetbelasting) for the first time. This tax was replaced by the VAT sales tax in 1968. In 1964, a payroll tax (loonbelasting) was introduced.
Dutch tax office (Belastingdienst)
The Belastingdienst is the tax collection and customs service of the Netherlands. It is part of the Ministry of Finance. It takes care of:
- The import, export and transit of goods.
- The detection of fraud (fiscal, economic and financial).
- The levying and collecting of taxes.
- Paying out benefits related to income for childcare, rent and health care.
The Dutch tax system
What are the main tax types that you will encounter whilst living and working in the Netherlands? Are you required to complete the annual income tax return? Here’s what you need to know about the Dutch tax system.
Tax advisors in the Netherlands
Doing your taxes is not fun. This is true for most Dutch citizens, let alone expats. Even the Belastingdienst admits this, hence their slogan: Leuker kunnen we het niet maken, wel makkelijker (we cannot make it more fun, but we can make it easier).
If you would like some help with your taxes, you should take a look at our list of Dutch services & advisors in the Netherlands.
Are you a highly skilled migrant working in the Netherlands? If so, see if you can make use of the 30% ruling tax advantage for expats in the Netherlands.