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Taxation in Netherlands
The Netherlands has some very high taxes - this article contains a brief overview on taxation in Netherlands. For further information you should seek qualified professional help when dealing with tax matters. |
• Residents need to have a burgerservicenummer which is the fiscal number equivalent to the "national insurance number" in the UK or "social security number" in the US. The tax department is known as the belastingdienst.
• Netherlands has some of the highest income taxes in the world - progressive tax rate bands apply of 33.5%, 42% and 52% which include social security contributions. The top rate is applied on income over approximately €55,000 - in Europe only Sweden and Denmark have higher top rates.
• 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 a "specific expertise" in your field that is not available locally. To get this ruling you and your employer must send a request to the tax office.
• If you lose your job any redundancy payment is regarded as income and will be taxed. There are no tax-free severance payments like in the UK.
• Netherlands has a wealth tax on savings, property and investments. Effectively this is set at 1.2% - with around the first €20,000 exempted. This wealth tax means that there is no capital gains tax.
• Corporate tax rates are reasonable, from 20% to 25.5%. Private limited companies are known as bv or besloten vennootschap.
• There is a Value Added Tax called the BTW (Belasting Toegevoegde Waarde) of 19% 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.
• Should you die whilst resident in Netherlands then your entire estate will have to pay inheritance taxes subject to certain exemptions. Be aware that rates can be as high as 68%.
• Other taxes in Netherlands are municipal taxes, property transfer taxes, payroll taxes, road tax, dog tax, custom duties...
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.