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Taxation in Netherlands


The Netherlands has some very high taxes - this article contains a brief overview of taxation in the country.

For further information you should seek qualified professional help when dealing with tax matters.

• Residents need to have a BSN (burgerservicenummer - citizen service number) which is the fiscal number roughly equivalent to the "national insurance number" in the UK, "social security number" in the US or "tax file number" in Australia. The number is also a general identifier required for other government services and healthcare. Also see 10 essential steps for expats arriving in Netherlands

• The Dutch tax revenue department is known as the Belastingdienst (Belasting=tax, dienst=service). Note that its staff are ordered not to speak English over the phone or at service desks. It sends all standard correspondence in a blue envelope - however there are plans to phase this out and go to a digital-only platform.

tax netherlands

• The Dutch tax return has 3 category boxes for different types of taxable income. Box 1 applies to employment income/home ownership, Box 2 applies to income from a substantial interest in a company and Box 3 to income from savings and investments.

• Netherlands has some of the highest income taxes in the world - progressive tax rate bands for 2017 apply of 36.55%, 40.8% and 52% which include social security contributions. The top rate of 52% is applied on income over €67,072 - in Europe only Belgium, Denmark, France, Portugal and Sweden have higher top rates. Taxpayers get a personal tax credit of around €2,250.

• If you are recruited or transferred from another country for a position in Netherlands you may qualify for the 30% ruling - this is where only 70% of your salary will be taxed, effectively lowering the tax rate. You must have "specific expertise" in your field and a minimum salary requirement for the position will apply. To get this ruling both you and your employer must file a detailed application to the tax office.

• If you lose your job any redundancy payment is regarded as income - so you will be taxed at your highest tax rate band. Tax can be mitigated using longer term insurance arrangements.

• Netherlands has a wealth tax (box 3) on savings, property and investments. This used to be effectively set at 1.2%  - 30% of an assumed 4% profit - with around the first €24,000 exempted. As of 2017, the exemption has risen to €25,000 but there are new taxable tiers in place for assets under €75K, €75-975K and over €975K. Effective rates rise progressively for each successive band - around 0.86%, 1.4% and 1.6% respectively.

This wealth tax means that there is no capital gains tax.

Corporate tax rates are 20% for the first €200k and 25% on the remainder. Dividends are taxed at 15%. Private limited companies are known as bv or besloten vennootschap.

• There is a Value Added Tax called the BTW (Belasting Toegevoegde Waarde) of 21% on most goods and services and 6% for food and other selected items. If you run a company you can reclaim the BTW from your expenses. If you live outside the EU you can request a VAT refund on any goods bought whilst in Netherlands subject to minimum purchase prices.

• Residents who own a property with a mortgage and live there get tax relief on mortgage interest payments. The future status of this relief is under discussion.

• Should you die whilst resident in Netherlands then your entire estate will have to pay inheritance taxes subject to certain exemptions. Rates vary between 10% and 40%.

• Other taxes in Netherlands are municipal taxes, property transfer taxes, payroll taxes, road tax, dog tax...

The above article is for information purposes only. Tax laws are subject to change.

Please note that unfortunately we cannot answer any personal questions on taxation / financial matters - you should speak with an accountant or a qualified international financial adviser.

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