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Conditions 30 percent facility

The 30 percent facility applies to you if you were recruited outside of the Netherlands or seconded from a country other than the Netherlands to work in the Netherlands. The following conditions apply as of 1 January 2012:

  • You are recruited outside a 150-km zone of the Dutch border (*).
  • You have a taxable income of minimal € 37,000 (in 2017), before applying the 30 percent benefit (**).

(*) You should have resided minimal 16 out of the 24 months prior to your first working day outside the 150-km zone.
(**) Reduced income norm of € 28,125 applies to employees with a MSc qualification younger than 30 years. No income norm is set for qualified scientists and medical doctors. 

Please note that the sign date on your employment contract should be set before your arrival date. The maximum validity of the 30 percent ruling is 8 years (as per 2012). This duration may be reduced if the employee resided in the Netherlands in the past 25 years.

Notable exemptions for PhD students

PhD students can obtain the 30 percent ruling within 1 year after their promotion date. The following conditions apply:

  • The PhD student lived in the Netherlands (including the 150-km zone from the Dutch border) during his or her doctoral research
  • The PhD student lived minimal 16 out of the 24 months outside the 150-km zone prior to the start of his or her doctoral research

 A qualified scientist (PhD) can also apply for the 30 percent ruling if:

  • The PhD research was conducted in the Netherlands and the PhD student was also employed
  • Employment started prior to the doctoral research and obtaining the PhD qualification was a condition for employment

The 30 percent ruling starts after obtaining the PhD qualification. 

Content of the facility (for employer)

If your employee is eligible for the 30 percent facility, you may pay him or her a maximum of 30 percent of the wages as a tax-free allowance for extraterritorial expenses, without the need to submit further evidence. This involves 30 percent of the wages from present employment including the allowance, which means 30/70 of the wages for payroll tax purposes.

Example
The wages excluding the allowance amount to € 40,000. The tax-free allowance for extraterritorial expenses will then be 30/70 x € 40,000 = € 17,143.

This is subject to the condition that the employee is not entitled to double tax relief in respect of those taxable wages. In other words, these wages must be fully taxable in the Netherlands.

Paying the allowance in addition to the wages

The tax-free allowance should be paid separately from the wages. To this end, the agreed wages may be reduced in accordance with employment law. An administrative division of the wages into a wage component and a tax-free allowance component for extraterritorial expenses is not permitted.

Extraterritorial expenses

You can pay the tax-free allowance to cover extraterritorial expenses. If the 30 percent facility applies, you are not required to retain documentary evidence. If you use the 30 percent facility, you are not allowed to pay the actual extraterritorial expenses tax-free as well.

If the total extraterritorial expenses exceed the allowance paid under the 30 percent facility, there is a possibility to reimburse the actual expenses. In that case, however, you will have to provide evidence for these extraterritorial expenses. If you can demonstrate that the expenses exceed 30 percent, the expenses actually incurred can be reimbursed free of tax. In this connection, there is no time restriction for the reimbursement of double housing costs.

The following costs qualify as extraterritorial expenses:

  • additional costs of living because prices in the country of work are higher than those in the country of origin. Examples include the additional costs of meals, gas, water and electricity
  • costs of a familiarisation trip to the new country of work, whether or not with the family, for instance in order to find housing or a school
  • costs of applying for or converting official personal documents, such as residence permits, visas and driving licences
  • costs of medical examinations and vaccinations required for the stay in the new country of work
  • double housing costs if the employee continues to live in the country of origin. These could be hotel expenses, for example
  • additional (initial) housing costs
  • storage costs for the household effects that are not moved to the new country of work
  • costs of travelling to the country of origin, for instance for family visits or family reunification
  • additional costs for the completion of a tax return, if this is more expensive than having the tax return completed by a comparable tax consultant in the country of origin
  • costs of a training course in order to learn the language of the new country of work, both for the employee and for the family members residing with him
  • additional (non-business) call charges for telephone calls to the country of origin

No extraterritorial expenses

The following items do not qualify as extraterritorial expenses and are therefore cannot be reimbursed free of tax:

  • secondment allowances, bonuses and comparable allowances (foreign service premium, expat allowance, overseas allowance)
  • capital losses
  • purchase and selling costs of a property (reimbursement of house purchase costs, broker's fee)
    compensation for higher tax rates in the country of work (tax equalisation)

Tax-free reimbursements in addition to the 30 percent facility

In addition to the 30 percent facility, the school fees for an international school or for the international department of an ordinary school can be reimbursed free of tax.

This is permitted if:

  • the curriculum at the school (department) is based on a foreign system
  • the school (department) is in principle only open to children of seconded employees

The following costs, amongst others, may also be reimbursed free of tax:

  • removal costs and the costs of the temporary storage and transfer of the household effects
  • costs of a familiarisation visit by the employee to the business in the country of work
  • costs of the application for or conversion of a work permit or a highly skilled migrant permit
  • commuting expenses (expenses for (regular) commuting)
  • telephone line rental costs
  • costs of business meals

Please note!

The 30 percent facility also applies to the employee insurance contributions. If your employee is insured in the Netherlands under the employee insurance schemes, you are not required to deduct employee insurance contributions from the amount of the 30 percent tax-free allowance.

Exception for PhDs

Are you an employee with a PhD title? And have you started working in the Netherlands within 1 year of obtaining your PhD? In that case you can make use of the 30% facility if you:

  • lived within a radius of 150 kilometres from the Dutch border during the doctoral research
  • lived within a radius of 150 kilometres from the Dutch border between obtaining your PhD and starting work in the Netherlands
  • lived more than 150 kilometres away from the Dutch border prior to commencement of your doctoral research
Exception to the 24-month term

For the exemption to the 24-month term we consider the 24 months prior to your 1st working day in the Netherlands. During those 24 months were you living more than 150 kilometres  in a straight line away from the Dutch border for longer than 16 months? In that case, you can make use of the 30% scheme. If you start working in the Netherlands, that means that you can work close to the border for a maximum of 8 months prior to your 1st working day.

Please note!

Have you previously worked in the Netherlands? And did you work outside of the Netherlands again after that? In that case, the 24-month term does not apply. You can make use of the 30% facility if your previous employment in the Netherlands:

  • began a maximum of 8 years ago, and
  • at that time you were living more than 150 kilometres in a straight line away from the Dutch border
Income requirement 30 percent facility

You possess a specific expertise

You can use the 30 percent facility if you have a specific field of expertise that is not or is only barely available on the Dutch employment market. You are deemed to possess that expertise if your salary not including the tax-free allowance in the Netherlands is at least in:

  • 2015: € 36,705
  • 2014: € 36,378
  • 2013: € 35,770
  • 2012: € 35,000

 

You are under the age of 30 and have a Master's degree

Are you under the age of 30 and in possession of a Master's degree? If so, you can use the 30 percent facility if your salary not including the tax-free allowance in the Netherlands is at least in:

  • 2015: € 27.901
  • 2014: € 27.653
  • 2013: € 27.190
  • 2012: € 26.605

You are conducting scientific research

Does your work in the Netherlands involve conducting scientific research? In that case, you are not required to have a minimum salary. You can make use of the 30 percent facility.

What is the 30 percent facility?

If you come to work in the Netherlands, you are possibly confronted with extra costs, so-called extraterritorial costs. Your employer may grant you a free (untaxed) reimbursement for the extraterritorial costs that you incur. Your employer may also provide you with 30 percent of your wage, including reimbursement, tax-free. This facility is known as the 30 percent facility. For this, it is not necessary to prove that expenses have been incurred.

Conditions

You need the Dutch Tax Office's permission to apply the facility. To obtain this, you and your employer should submit an application. You are eligible for this allowance if you meet a number of conditions

Combined income levy

The combined income levy is the aggregate amount – after application of double tax relief facilities – of the tax owed on the taxable income in the three boxes and the national insurance contributions calculated in accordance with Article 10 (1) and (2) of the National Insurance (Funding) Act.

Contribution base

The national insurance contributions owed are calculated on the contribution base. The contribution base is derived from the taxable income in Box 1. The contribution base also includes income received abroad that is not subject to income tax in the Netherlands.

Deferral facility

If your income is (almost) entirely subject to taxation in a country other than the Netherlands, it is possible that some deductible items do not result in a refund of income tax in the Netherlands. In that case, these deductible items will be reserved. If you receive income in the Netherlands in the future, double tax relief will be granted in retrospect with regard to the reserved amount, and you will receive a tax refund or reduction. This is known as the deferral facility.

Employee insurance contributions

The employee insurance schemes are specifically applicable to staff in paid employment. The contributions under these schemes are paid by the insured person's employer to the Tax and Customs Administration. The contributions are made to cover various insurance schemes, including:

  • occupational disability insurance scheme (WAO or WIA);
  • unemployment insurance scheme (WW);
  • health care insurance scheme (ZVW);
  • sickness insurance scheme (ZW);

Subject to certain conditions, the employee insurance schemes entitle employees to a benefit or provision. The Employee Insurance Implementing Body (Uitvoering Werknemersverzekeringen, or UWV)pays the benefits in the event of occupational disability, unemployment or sickness.

Fictitious disposal

A fictitious disposal is a legal act or other event that does not involve a proper disposal, but is nevertheless regarded as a disposal by the law.

Immigration

Immigration is involved if you move to a country other than your country of origin with the intention to take up residence in that country.

Income from a substantial interest

The income from a substantial interest is the aggregate amount of:

  • the benefits you receive on shares or profit-sharing certificates that are part of a substantial interest (regular gains), reduced by the deductible expenses; and
  • the profits you realise upon the disposal of shares or profit-sharing certificates that are part of a substantial interest, or upon the disposal of a part of the rights pertaining to these shares and profit-sharing certificates (capital gains), reduced by the deductible expenses;

reduced by the personal allowance;

Income from employment and home ownership

The income from employment and home ownership is the aggregate amount of:

  • taxable profits from business activities;
  • taxable wages;
  • taxable income from other activities;
  • taxable periodic benefits in money and kind;
  • taxable income from an owner-occupied property;
  • negative expenditure on income insurance;
  • negative personal allowance items;


reduced by:

  • expenditure on income insurance;
  • expenditure on childcare;
  • personal allowance;
Kilometre record

A kilometre record is a record in which all journeys made with a particular car – both for business and for private purposes – are registered. This record should meet specific requirements.

National insurance contributions

Like wage tax, national insurance contributions are levied on the employee's wages. The employer paying the wages has to withhold these contributions from the employee's wages and remit them to the Tax and Customs Administration. The following national insurance schemes apply:

  • statutory pension insurance scheme (AOW);
  • surviving dependants' insurance scheme (ANW);
  • child benefit insurance scheme (AKW);
  • exceptional medical expenses insurance scheme (AWBZ).

Most of the national insurance schemes are administered by the Social Insurance Bank (Sociale Verzekeringsbank, or SVB). The SVB is not responsible for levying and collecting the contributions (this is the task of the Tax and Customs Administration), but sees to the implementation of the national insurance schemes.

Non-resident taxpayer

You are a non-resident taxpayer if you are a natural person who does not live in the Netherlands, but receives income from the Netherlands.

Notional rental value

The notional rental value is the benefit from home ownership that is established by using a statutory table and should be added to the income from employment and home ownership. The notional rental value is a percentage of the value of the owner-occupied property. This value is determined in accordance with the Valuation of Immovable Property Act (Wet waardering onroerende zaken, or WOZ).

Owner-occupied property

An owner-occupied property is a property to which you or your partner hold the (beneficial) title and which serves you (both) as principal residence on a permanent basis. In certain situations, there may temporarily be two owner-occupied properties. For tax purposes, the following properties can also be regarded as owner-occupied properties:

  • a property (principal residence) of which you have the usufruct, if this usufruct was obtained by inheritance;
  • a membership in a cooperative apartment association (principal residence);
  • a houseboat (principal residence) with a permanent mooring place;
  • a caravan (principal residence) with a permanent site;
Payroll tax

Payroll tax is an advance levy in respect of income tax and social security contributions. The Dutch Tax and Customs Administration is responsible for levying wage tax and social security contributions. Wage tax and social security contributions together are often called payroll tax, because they are withheld and paid by the withholding agent as one amount.

Private use of company car

Under the so-called 'private use' facility, an amount is added to your income if you use a car made available by your employer also for private purposes. This facility also applies if you run a business and use a company car for private purposes. The amount of the addition depends on the extent of the private use, but is at least 0 to 25 per cent of the value of the car. If the actual value of the private use exceeds the addition calculated on the basis of the statutory percentage, this higher value will apply.

Protective assessment

A protective assessment is an assessment by which the amount of tax owed is determined, but usually not collected. The income tax owed on the income subject to a protective assessment is calculated separately and shown in a protective assessment. If matters take a course considered undesirable by the legislator – e.g., if pensions are commuted after emigration – the protective assessment will be implemented retrospectively.

Recipient

You are a recipient if you, as a Netherlands-based (legal) person, temporarily use the services of one or more non-resident employees who have been made available to you by a supplier.

Reference date

The reference date is relevant for the taxation of income in Box 3. The reference dates are 1 January and 31 December. Different reference dates apply at the beginning and end of a person's tax liability in the Netherlands, upon birth or immigration and upon death or emigration.

Resident of the Netherlands

You are a resident of the Netherlands if you live in the Netherlands. The Tax and Customs Administration decides whether you live in the Netherlands by reviewing the facts and circumstances pertaining to your situation in relation to each other. Such facts and circumstances include the duration of your sojourn in the Netherlands, the centre of your social life, your family's place of residence, your place of work, etc.

Resident taxpayer

You are a resident taxpayer if you are a natural person who lives in the Netherlands.

Second home

A second home is a property that is not your principal residence. If this (second) home is available to you during more than 30 per cent of the year and is situated in the Netherlands, it will be taxed in Box 3 on its so-called WOZ-value, i.e. the value for the purpose of the Valuation of Immovable Property Act. If the property is available to you during less than 30 per cent of the year, or is not situated in the Netherlands, it will be taxed in Box 3 on its market value.

Secondment of an employee

If you came to the Netherlands through a secondment arrangement, the Dutch Tax Office usually regards the Dutch based organization as employer, which is therefore liable for payroll taxation. The 183 days rule doesn’t apply.

The Dutch Tax Office qualifies you as a Dutch employee of the Dutch based organization if the following three conditions apply:

  1. You follow (work) instructions from the Dutch based organization;
  2. The Dutch based organization is liable for and benefits from your labor results
  3. The full labor expenses are (directly or indirectly) paid for by the Dutch based organization 
Social security treaty

A social security treaty is an agreement between two or more countries that provides rules for determining under which social security system a person is insured.

Substantial interest

A substantial interest is involved if you – whether or not together with your partner – meet one of the following conditions, either directly or indirectly:

  • You own an interest in a company comprising at least 5 per cent of the issued share capital, either in the form of shares or in the form of call options on shares.
  • You own profit-sharing certificates, entitling you to at least 5 per cent of the annual profits or to at least 5 per cent of the distribution made upon liquidation.
  • You are entitled to at least 5 per cent of the votes in the general meeting of a cooperative.
Supplier

When staff is supplied to Dutch businesses, the term 'supplier' refers to the non-resident (legal) person who makes non-resident employees available in the Dutch labour market. This term covers both employment agencies that are specialised in supplying staff and employers who occasionally make an employee available in the Dutch labour market

Tax partner

In the following situations, the Tax and Customs Administration will qualify you as a tax partner:

  • You are a spouse not living permanently separated.
  • You are a registered partner not living permanently separated.
  • You and an unmarried adult elect to be regarded as each other's tax partners, and meet the following conditions:
    •       You ran a joint household for more than six consecutive months during a particular calendar year.
    •       During that period, you were both registered at the same address in the municipal records.
    •       If you are cohabiting as parent and child, you should both be 27 years of age or older at the start of the calendar year.
Tax treaty

A tax treaty is an agreement between two or more states, the main purpose of which is to prevent certain revenue from being taxed twice. In the treaty, the contracting states record in what way the right to tax is to be allocated between them. For an overview of the states with which the Netherlands has concluded tax treaties.

The 183 days rule - Which country levies tax on your income?

Which country levies tax on your income is usually agreed upon through a (bilateral) tax treaties. This to avoid double taxation on your income. The Dutch Tax Office set up such a treaty with over 100 countries. If no treaty exists, the Dutch Tax Office decides which country levies tax on your Dutch income. 

The tax treaty usually determines that the country in which you work (work country) levies tax on your income.  The home country (i.e. the country in which your resided 183 days and over) instead can levy tax on your income if the following three conditions applies:

  1. You resided in the Netherlands (work country) for less than 183 days of the applicable calendar year;
  2. Your employer is not based in the Netherlands;
  3. You have not set up a representative office (fixed and defined office premises) for your employer in the Netherlands

Note: in case of a secondment of an employee, the 183-days rule is usually not applicable.  See under secondment of an employee.

 

 

Total tax credit

The total tax credit is the aggregate amount of the tax credit for income tax purposes and the tax credits for purposes of the AOW, ANW and AWBZ schemes respectively.

Wage tax

Wages paid to an employee and benefits paid to a benefit recipient should be reduced - inter alia - by wage tax which tax should be remitted to the Tax and Customs Administration. Normally, the wage tax is an advance levy in respect of the income tax owed. This means that wage tax already paid is usually offset against the amount of income tax owed.

Withholding agent

If you pay wages or benefits to an employee or a benefit recipient, you have to withhold wage tax and social security contributions (together also known as payroll tax) from these wages, and pay them to the Tax and Customs Administration. If you have to withhold and remit payroll tax, you will be known as the withholding agent. You are also obliged to withhold and remit payroll tax if you made staff available, i.e. if you are a seconder, supplier, etc.

Worldwide income

The worldwide income is the total income in Boxes 1, 2 and 3, earned anywhere in the world and computed in accordance with the Dutch tax rules. Therefore, the worldwide income also includes the revenue which the Netherlands is not allowed to tax under national and international regulations. Examples of such revenue are income from employment, profits from business activities or capital in countries other than the Netherlands

Care allowance for handicapped children (TOG)

Disabled children often need extra care. If your child lives at home, you may qualify for a care allowance (TOG) to help you provide that extra care.

For the 1st and 2nd quarters of 2008, the allowance is € 206.24. As from 1 July 2008, the allowance is € 210.08 per quarter. This amount will first be paid for the 3rd quarter of 2008. The allowance is paid after the end of the quarter concerned.

If you wish to claim a TOG care allowance, ask for a claim pack from the TOG department of the SVB ("Sociale Verzekeringsbank") office in Roermond, telephone number +31(0)475 368040.

Main qualifying conditions
You can qualify for a care allowance if you live in the Netherlands and are the parent or carer of a handicapped child aged from 3 to 17 who lives at home with you.

A child is considered disabled for the purposes of the TOG scheme if he or she:

  • has a physical or mental illness or disorder;
  • which causes restrictions (the handicap);
  • resulting in the child being substantially more dependent on care, assistance and supervision than a healthy child of the same age.


Assessment of the handicap
The handicap will be assessed by Argonaut, whose medical experts will base their assessment insofar as possible on the written details you provide. Argonaut will then provide the SVB will a medical opinion. Finally, the SVB will decide on your claim.
The purpose of the assessment is to determine the extent to which a child is dependent on care, assistance and supervision. What is the child capable of doing independently? Is the child able to wash him or herself, dress or undress, etc.? Does the child suffer from serious behavioural disturbances, show aggression, have a tendency towards self-mutilation?

The following factors are considered:

  • personal hygiene;
  • continence / incontinence;
  • ability to eat and drink unaided;
  • mobility;
  • medical assistance (does the child need assistance in taking medicine, etc.);
  • behaviour;
  • communication;
  • assistance needed inside and outside the home;
  • the extent to which the child can keep himself or herself occupied.
Child benefit

Babies are expensive. Nappies, clothes, the pram … all these things cost money. The Dutch government provides for child benefit to help you with the costs of bringing up your child. The "Sociale Verzekeringsbank" (SVB) is the organization that pays your child benefit. 

If you live or work in the Netherlands, you will be entitled to receive Dutch child benefit. Child benefit is paid after the end of each quarter for children up to age 18. 

Claiming child benefit
Claiming child benefit is straightforward. A claim pack will be sent to you automatically if you live in the Netherlands. This is because the municipality where you live will inform the SVB of your and your new baby’s details after you register the birth with them.

The SVB will also provide you with a code that you can use to submit your claim via the internet. If you do not have an internet connection, you can fill in a paper claim form, which you will find in the claim pack.

Your municipality will also inform the SVB if there are any further additions to your family. The SVB will then send you a letter about your new child benefit entitlement.  

If you have just come to live in the Netherlands, or have adopted a child, or want to claim child benefit at another point in time, you can request a claim form from the SVB. The SVB office serving your area will then take a decision on your entitlement. 

Child benefit for children aged 16 and 17

When a child turns 16, there is a change in the qualifying rules for child benefit. You can still receive child benefit for children aged 16 or over, but the qualifying conditions are different from those for younger children. For this category, additional conditions apply concerning the child’s education and income. It is therefore important that you notify the "Sociale Verzekeringsbank" (SVB) of any changes in your family.

Your child goes to school
If your child goes to school and has at least 213 hours of lessons or practical classes per quarter, and the education is regular full-time education, you will continue to receive child benefit as usual. If your child pursues higher vocational training or goes to university, however, your child benefit will be stopped and your child can apply for a student loan or grant.

If your child stops pursuing the course or interrupts the course for longer than 6 months, the child benefit may also be stopped. The same applies if your child switches from full-time to part-time education. In that case, you may still be entitled to child benefit if your child qualifies as unemployed or incapacitated for work.

Your child is unemployed or disabled for work
You can receive child benefit for children who are unemployed (or partly unemployed). In that case, your child must register as a job-seeker within a month of becoming unemployed. NB: If your child ends or interrupts his or her course of education, he or she must also register as a job-seeker within one month. By "register as a job-seeker”, we mean with the CWI Centre for Work and Income for at least 19 hours a week. In that situation, your child cannot turn down a job offer.

Children who are disabled for work can qualify for child benefit as well.

Your child has a job
Children who go to school or who are unemployed are allowed to earn a certain amount per quarter. If your child’s earnings exceed that amount, you are not entitled to child benefit for that quarter.

If your child lives at home with you, and earns less than € 1,240 net per quarter, this will not affect your child benefit. If your child lives away from home, he or she can earn up to € 1,754 per quarter without this affecting your child benefit.

I did not receive the letter "Jaaroverzicht kinderopvang" (annual statement childcare cost).

Blue Umbrella receives the Tax Office correspondence for many clients. Blue Umbrella checks whether response is required and will act on your behalf. Have you requested Blue Umbrella to receive your tax letters? No action is required from you, Blue Umbrella will contact you. If you didn't hear from Blue Umbrella, please contact our customer service

I received a letter from the Tax Office. What do I have to do?

The Dutch Tax Authorities send out two types of letters. One with their logo printed in Blue and one with their logo printed in Red. The former is about letters which are send out by the tax unit for income tax. The latter is used by the tax unit for the childcare allowance.

If you have a domestic or private servant or a nanny and you expect this "blue" letter to be about your situatie as employer, please contact Blue Umbrella. Usually, these letters are about declaring income tax for your servant or nanny.

All tax letters with the red logo is about your childcare allowance. Every time Blue Umbrella contacts the tax office to file for a change, you receive a confirmation letter from the tax office. We advise you to retain a copy of those letters which contain the subject header "beschikking" or "herziene beschikking". Please contact Blue Umbrella if you are unsure what to do with the letter. 

I work for an International Organization. I am entitled to childcare allowance in the Netherlands?

Employees of International Organization (embassy staff included) may qualify for the Dutch childcare allowance. If you and your partner or spouse, living with you at the same address, are engaged in a gainfull occupation and you make use of formal childcare in the Netherlands you can apply for an allowance. Contact our Blue Umbrella staff for more information.

I'd like to sign up for Blue Childcare . How does it work?

To sign up for Blue Childcare is very easy. Just create your own MyBlue login by free registering on the home page. After you have registered you can choose any service you like to have.

To sign up for the Blue Childcare subscription, you have to agree with the Blue Umbrella terms and conditions. You receive an agreement which we need you to sign. 
 
Once we have received your signed agreement, Blue Umbrella starts to file for your childcare allowance. We will contact your childcare center and let them know that they can charge us for your childcare cost. You receive from us a notification for your parental contribution (see under "What is my parental contribution").

What is Blue Childcare?

Our Blue Childcare Service will help you find a childcare provider and will assist you with the paperwork. We will pay the invoices directly to your childcare provider and we will apply for childcare allowance on your behalf. The monthly fee will be collected from your account after you have recieved the childcare allowance from the Dutch Tax Office.

What is Dutch childcare allowance?

Dutch childcare allowance (“kinderopvangtoeslag”) is a subsidy provided by the Dutch tax office to help working families meet the cost of childcare in the Netherlands.  The tax office provides an allowance for each child receiving professional childcare.  It is calculated according to each family’s projected total monthly childcare costs and expected household income for that fiscal year.  Proof of each family’s actual childcare costs and annual income is required at the end of the fiscal year.

The childcare allowance can be used to subsidise any form of professional childcare, including daycare centers (crèches), after school care, private childminders and nannies.

The right to receive Dutch childcare allowance is not limited to Dutch nationals.  However, to apply for and receive the allowance the Dutch tax office requires all paperwork to be completed in Dutch.

Blue Daycare is a service offered by Blue Umbrella to help families within the expat community apply for and receive the childcare allowance.  Parents with children attending a daycare center (crèche) can expect to save up to 80 percent of the cost of their childcare.

What is my parental contribution?

Your parental contribution

The breakdown of your monthly contribution can be found on your MyBlue page. Your parental contribution is set provisionally, as it is comprised of an estimated, fixed, childcare cost amount and your Blue Umbrella fee.

Your real monthly childcare cost, paid by Blue Umbrella, may vary on a monthly basis. Those variations between the estimated and the real childcare cost may result in an actual lower or higher contribution.

Deviations beyond a certain bandwidth will be corrected during the course of the year. Relatively small deviations will be settled at the end of the year.

Blue Umbrella will contact you early in the next calendar year to inform you about your final childcare allowance entitlement.

What is the Dutch Child Benefit?

Dutch Child Benefit

The Dutch Child Benefit - not to be confused for Ducth Childcare Allowance - is money from the Dutch government paid towards the expenses of raising a child. If you live or work in the Netherlands and you have a child you are eligible to receive this benefit.

Can you get Dutch child benefit?
If you have children up to 18 years old, the government will help you with the costs of bringing them up and caring for them. This financial support is called child benefit (kinderbijslag). The rules on who qualifies for the child benefit and how much child benefit will be paid are set down in the National Child Benefits Act (AKW).

You can get the child benefit if the following applies:
You qualify for the child benefit if you for bring-up and care for a child of your own, but also:

  • an adopted child;
  • a foster child;
  • a stepchild;
  • another child you bring-up and care for as if it were your own child


The amount of the child benefit
The amount of your child benefit depends on your child's age. Children aged 6 and over qualify for a higher child benefit rate. The child benefit will increase again when your child turns 12. If your child does not live at home with you, for example, because he or she is handicapped, you may face high expenses. In such cases, child benefit may be payable at twice the basic rate.  

Receiving child benefit
Child benefit is paid on a quarterly basis, i.e. every three months. The first payment you will receive will be for the next quarter after your child's birthday. In other words, your child benefit will start in January, April, July or October. The SVB (Social Security Bank) pays child benefit after the end of each quarter.

However, if you adopt a child or if you have just come to live in the Netherlands, your child benefit may start at a different time.
Child or children under 18, you will get Dutch child benefit. Dutch child benefit is paid by the SVB.

How to claim child benefit
It is very easy to claim child benefit for children who are born in the Netherlands. When your first child is born, and you register the birth with your local authorities (gemeente / city hall), they will inform us of the birth of your child. We will then send you a claim form within 2-4 weeks.

Child benefit adjusted automatically when further children are born
If you are receiving child benefit and a further child is born to you in the Netherlands, you do not need to do anything. We will adjust your child benefit automatically. You will be sent a letter stating the new amount. If you live outside the Netherlands when your child is born, you must inform us of the birth of your child.

When must you report the birth of your child to us yourself?
You must inform us of the birth of your child yourself if you:

  • do not live in the Netherlands;
  • come to live or work in the Netherlands with one or more children;
  • adopt a child;
  • do not report the birth of your child to your local authorities within one month

If you contact the SVB, they will send you a claim form straight away.

Claiming child benefit: via the internet or by post
You can submit a claim via the internet or by post. If you claim child benefit via the internet, you will be informed about your child benefit sooner.

How much child benefit will you get?
The amount of your child benefit depends on the age of your child. You will get a higher amount when your child turns 6. The child benefit will increase again when your child turns 12. The amounts are adjusted every year.

Child benefit at twice the basic rate if you have high expenses
If your child does not live with you, for example, because he or she is disabled, and you are faced with high expenses, you may be eligible for child benefit at twice the basic rate. You can read more about this under 'your child is leaving home (temporarily)'.

Higher amount for children born before 1995
The amount of child benefit paid for children born before 1 January 1995 depends on the number of children you get child benefit for. The more children for whom you get child benefit, the higher the amount will be for your children born before 1995.

Why am I asked twice for the 'Annual Statement Childcare Cost"?

Blue Umbrella processes your final annual childcare of the previous calendar year first to settle your payment balance with Blue Umbrella. The Tax Office processes your final annual childcare cost of the previous calendar year to determine your childcare allowance entitlement of the previous calendar year.

Blue Umbrella sends all clients at the beginning of a new calendar year a correction form for the final childcare allowance filing of the previous calendar year. Based upon this "final childcare allowance filing"  Blue Umbrella clears client's payment balance with Blue Umbrella. Resulting in a refund or an additional payment.

In the middle of the calendar year, the Tax Office sends out a similar request to every parent who claimed childcare allowance in the previous calendar year. This time, the Tax Office requests proof of childcare cost for the claimed childcare allowance. The Tax Office links this information with your income tax filing. Based upon the submitted proof - annual statement childcare cost - your allowance entitlement will be determined. Resulting in a refund or additional payment.

If no changes in your childcare cost overview or annual income statement occurred, a Nil settlement with the Tax Office follows. 

Your child is living away from home

It is also possible to receive child benefit for children who live away from home, but for this category the "Sociale Verzekeringsbank" (SVB) will need more information from you. For children who live at home, the minimum costs that parents incur are easy to establish. In the case of children living away from home, however, these costs can vary considerably. It is quite possible that you have spend more than what you spend for a child living at home. In such cases, you may qualify for a higher child benefit rate.

For this reason, the SVB needs to know how much you contribute to the cost of providing for your child that lives away from home. This means that you may be asked to provide evidence of the expenses you incur.

Your monthly contribution schema

On your MyBlue page you'll find your monthly contribution schema. This schema tells you how much contribution you have to pay each month to Blue Umbrella. The contribution is composed of your monthly childcare cost (childcare center or child minder) and the Blue Umbrella fee minus your allowance entitlement. Note that your allowance entitlement may change over the course of the year if your childcare cost and/or your childcare allowance changes. Your parental contribution is automatically adjusted if the childcare cost or childcare allowance changes. Your contribution schema tells you what has changed

I receive letter's from the Tax Office, which I don't understand. What can Blue Umbrella do for me?

If you receive letters from the Tax Office, you my be unsure whether action is required. Blue Umbrella can help you. You can request Blue Umbrella to receive your Tax Office correspondence. Blue Umbrella will scan the letters for you and checks whether action is required. If so, Blue Umbrella will contact you. Important letter from the Tax Office will be made available onto your MyBlue page.

I'd like to sign up for Blue Mail. How does it work?

To sign up for Blue Mail is very easy. Just create your own MyBlue login by free registering on the home page. After you have registered you can choose any service you like to have.

What is Blue Mail?

With Blue Mail you will no longer miss tax mail, (regardless your physical address), or lose any tax mail (thanks to our online archive), and we will remain your point of contact for the Dutch Tax Office (even after you have moved back to your country of origin). Wherever you are, you will always have online access to your Dutch Tax Correspondence via your MyBlue Page.

I cannot access my MyBlue page

If you forgot your username of password for your MyBlue page, click here to retrieve your username and password. Please note that the e-mail address used for your Blue Umbrella registration is required.

If you continue experiencing access or login problems to your MyBlue page, pleace contact Blue Umbrella

I have a Blue Chilcare subscription. What does Blue Umbrella do for this subscription?

Blue Day is a subscription for parents who have one or more children attending a formal daycare center ("crèche"). Blue Umbrella pays your daycare invoices, files for your childcare allowance, continuously update your allowance account for all changes related to income and childcare cost, mediates between parents and the Tax Office for all issues that may arise. After the end of the year, Blue Umbrella helps you issuing annual statements to the Tax Office.

I have a Blue Mail subscription. What does Blue Umbrella do for this subscription?

With Blue Mail you will no longer miss tax mail, (regardless your physical address), or lose any tax mail (thanks to our online archive), and we will remain your point of contact for the Dutch Tax Office (even after you have moved back to your country of origin). Wherever you are, you will always have online access to your Dutch Tax Correspondence via your MyBlue Page.

I have a Blue Tax Return subscription. What does Blue Umbrella do for this subscription?

At Blue Umbrella it is simple, straightforward and completely online. Even better, it is affordable at a flat fee for € 125 per income tax return filing (€ 175 for couples). No unpleasant surprises of billing extra hours. No matter how complex your non-business personal tax situation is.  We process all types of Dutch income tax return filings for the same price.

After you have submitted your online tax questionnaire, we will make a assessment and upload the result in a tax refund report on your MyBlue Page. After you have agreed the report we will sent it to the Tax office.

I'd like to sign up for Blue Tax return. How does it work?

To sign up for Blue Tax return is very easy. Just create your own MyBlue login by free registering on the home page. After you have registered you can choose any service you like to have.

The amount Blue Umbrella deductes for Blue Childcare each month from my bank account does not match the Blue Umbrella invoice. Why is that?

Blue Umbrella places an invoice on your MyBlue page for its service. The subscription amount stated on the invoice is not the amount we deduct from your bank account.  Blue Umbrella pays your childcare invoices (either from your childcare center or child minder) and receives your childcare allowance. The difference between these two, together with the invoice amount, is what we deduct from your bank account. Your subscription cost is deducted together with your childcare contribution. Blue Umbrella calls this your (net) parental contribution. See also under "your monthly contribution schema" and "what is my parental contribution?". 

Aggregate family income

Aggregate family income is your total (gross) income formed by your combined income of your boxes 1, 2 and 3. If you have a tax partner throughout the whole year, you must also take this partner’s income into account

Company car

If you exercise an employment or run a business with a company car that is also used for private purposes, a special tax facility will be applicable to you. The benefit entailed by the private use of a passenger car or van made available by your employer will be taxed as wages in kind. This addition will be reduced by wage tax/national insurance contributions and the income-related contribution towards the health care insurance scheme. This addition is a percentage of the value of the car. The addition for private use applies to passenger cars and vans.

The value of a passenger car is based on the original list price of the car in the Netherlands, including VAT and private motor vehicle and motorcycle tax (Belasting op personenauto's en motorrijwielen, or BPM). This also applies if the car was purchased abroad or is registered abroad. As long as no BPM is owed on vans, the value of a van is based on the list price including VAT. In addition, certain vans may be eligible for a relaxed facility. If your car is older than 15 years, the addition for private use will be a percentage of the market value.

See also:

  • Size of the addition for private use;
  • Use does not exceed 500 kilometres;
  • Kilometre log;
  • Statement of no private use of company car;
Deductible expenditure Box 1

The following items apply for deductible expenditure Box 1:

  • Employee's allowance;
  • Deduction of mortgage interest and other deductible expenditure;
  • Expenditure on income insurance: annuities and other premiums;
  • Offsettable losses from employment and home ownership;
Double tax relief

To avoid a situation in which you have to pay tax in several countries, you are entitled to an income tax relief in the Netherlands, the so-called double tax relief. We calculate the double tax relief per box based on the tax that you have to pay for each box. The double tax relief cannot exceed the amount of tax you owe in the box concerned. This means that any taxable income in the other boxes is not taken into account when calculating the relief in 1 box. However, your income from abroad must have a positive balance.

Roll-over scheme

In the various boxes, we take the negative foreign income or positive foreign income components into account for which no relief was granted in the past, when calculating this relief. This is called the roll-over scheme.

Methods to calculate the relief

The way we calculate the double tax relief depends on the type of income and the country in which you received this income. We have 2 methods: The exemption method and the setoff method. In addition, the calculation of the relief differs for you if you have resident taxpayer status or if you have non-resident taxpayer status.

Please note
The double tax relief does not apply to the levy of national insurance contributions. Other rules apply here.

Elderly person's tax credit

In 2008, you are entitled to the elderly person's tax credit if you meet the following conditions:

  • You are 65 or older on 31 December 2014;
  • Your total income in 2014 in Boxes 1, 2 and 3 does not exceed € 35,770;

The elderly person's tax credit amounts to € 1,042 in 2014.

Single elderly person's tax credit
You qualify for the single elderly person's tax credit if you receive a statutory old age pension (AOW) for single persons.

The single elderly person's tax credit amounts to € 429.

Employee's allowance (deductible expenditure box 1)

If you receive wages or a salary and certain conditions are fulfilled, you can deduct expenses of commuting by public transport. Seafarers are entitled to a seafarers' allowance on certain conditions. No other work-related expenses can be deducted.

Expenditure on income insurance: annuities and other premiums (deductable expenditure Box 1)

If you have a pension shortfall and you took out an annuity policy with a life insurance company to make up this shortfall, you may – on certain conditions – deduct the premiums paid, up to specific maximum amounts. Briefly put, you will have a pension shortfall if you build up less pension than necessary to obtain a retirement provision (including AOW benefits) equalling 70 per cent of your earned income. In this connection, it is assumed that you build up pension over a 35-year period. The additional amount you can deduct because you have a pension shortfall is known as the 'annual margin'.

The maximum amount you may deduct in annuity premiums depends on the size of your income and the increase in your pension entitlements, among other things. The decisive factor in this connection is your income in the previous calendar year. To be eligible for a deduction of premiums in 2008, you should pay your annuity premiums before 1 April 2009. The deadline with regard to self-employed person's annuity schemes is 1 July 2009.

Other premiums are deductible as well. The deduction of these premiums is not restricted to a maximum deductible amount. This involves the following premiums:

  • premiums towards occupational disability insurance for yourself;
  • premiums towards annuities for handicapped major children or grandchildren;
Extraterritorial costs 30 percent facility

Examples of extraterritorial costs for the 30 percent facility are:

  • additional costs for maintenance because prices in the Netherlands are higher than those in the country you come from
    Examples of these extra expenses include meals, gas, water and electricity.
  • costs for a trip to the Netherlands to get acquainted with the country, possibly with your family, for example to look for a house or a school
  • costs to apply for or convert official personal documents, such as residency permits, visas and driver's licences
  • costs for medical tests and vaccinations for the stay in the Netherlands
  • double accommodation costs if you keep your residence in the country you come from
    For example, hotel costs.
  • additional (including initial) accommodation costs
  • storage costs for that part of your household effects that you do not move to the Netherlands
  • travelling costs to the country where you come from, for example a family visit or a family reunion
  • additional costs for having the income tax return filled in if this is more expensive than having the return filled in by a comparable tax adviser in the country you come from
  • costs to follow a course to learn the Dutch language for you and the family members staying with you
  • additional (non-business) costs for telephone calls to the country you come from

Further information

For more information, please see 30 percent facility

Filing an application for the 30 percent facility to be applied

You will need the consent of the Dutch Tax Office in order to make use of the 30 percent facility for incoming employees. For this, you can file an application, together with your employer, using the form 'Verzoek toepassing 30%-regeling'. You can download this form ('Application for the 30 percent facility to be applied', only available in Dutch) or call the Tax Information Line Non-resident Tax Issues.

Tax Information Line for Non-resident Tax Issues

Telephone number: (055) 538 53 85
From abroad +31 555 385 385

Opening times
Monday to Thursday: 08.00 - 20.00 hours. Friday: 08.00 - 17.00 hours.

General tax credit

All taxpayers are entitled to the general tax credit. Your employer or benefits agency already takes the general tax credit into account when withholding wage tax and national insurance contributions. Partners are entitled to this tax credit individually. If one of the partners has little or no income, (lower than approximately € 6,150), and therefore does not (fully) utilise his or her own tax credit, this partner – subject to conditions – can receive a payout of (a part of) the amount from the Tax and Customs Administration, for instance in the form of a provisional refund.

If you are younger than 65, the general tax credit in 2014 will be maximal € 2,103. If you are 65 or older, the tax credit will be maximal € 1,065.

Health Care Insurance Act

On 1 January 2006, the Health Care Insurance Act (Zorgverzekeringswet) entered into force. This new act has put an end to the difference in premiums paid under the Compulsory Health Insurance Act (Ziekenfondswet) and private insurance schemes. Anyone who is insured under the Exceptional Medical Expenses Act (Algemene Wet Bijzondere Ziektekosten, AWBZ), with the exception of military personnel in active service and conscientious objectors for the purposes of the AWBZ, will be obliged to take out basic insurance with a care insurer. For the basic insurance you will have to pay a premium to the insurer. This is known as the nominal premium. Depending on your income and family situation, you may be eligible for an allowance in respect of this premium: the health care allowance.

In addition to the nominal premium, every person obliged to take out insurance has to pay an income-related contribution. The Tax and Customs Administration has been designated as the administration agency imposing and collecting the income-related contribution.

If you do not live in the Netherlands
The Health Care Insurance Act will also apply if you do not live in the Netherlands, but are insured under the AWBZ in the Netherlands. If this is the case, you are obliged to take out basic insurance, for which you have to pay the nominal premium and the income-related contribution. In addition, you may be entitled to a health care allowance. If any members of your family are insured under the AWBZ, they, too, will be obliged to take out insurance under the Health Care Insurance Act. This only concerns persons who are covered by the Dutch social security system by virtue of the Compulsory Insurance (Additional Categories of Persons) Decree (Besluit uitbreiding en beperking verzekeringsplicht), such as the families of members of the Dutch Diplomatic Service abroad or the families of other seconded Dutch civil servants.

If you are not compulsorily insured under the AWBZ in the Netherlands, an international social security regulation may be applicable. The Netherlands has agreed international social security regulations with the EU Member States, Bosnia-Herzegovina, Cape Verde, Croatia, Iceland, Liechtenstein, Macedonia, Morocco, Norway, Serbia-Montenegro, Switzerland, Tunisia and Turkey. In that case, you will be entitled to medical care in your country of residence, which country may pass on the costs of this care to the Netherlands. The Netherlands may subsequently ask you for a contribution. This also applies to any members of your family who are not compulsorily insured under the AWBZ. If an international social security regulation applies to you, you and your family members (if any) should report to the Health Care Insurance Board (College voor Zorgverzekeringen, CvZ). The CvZ will take care of registration and impose and collect the contribution.

The income-related contribution: on what income is it calculated?
The income-related contribution is calculated on the so-called 'contribution income' (hereafter: income). This income is the total amount you receive in:

  • Taxable wages
    • This will be the case if you are employed or receive social security benefits, pension benefits or annuity benefits from which payroll tax is withheld.
  • Taxable profits from business activities
    • This will be the case if you run a business.
  • Taxable revenue from other activities
    • This will be the case if you work as a freelancer, for example.
  • Taxable periodic benefits in money and kind
    • This will be the case if you receive taxable periodic benefits in money and kind – such as alimony from your ex-partner or annuity benefits – from which no payroll tax is withheld.

Other income is not included in the contribution income. This means, for instance, that income from capital such as interest and dividends, and annuity benefits falling within Box 3 for income tax purposes, will be disregarded in determining the contribution income.

The income-related contribution: how much do you pay?
The income-related contribution is a percentage of your income. The contribution is calculated on income up to € 31,231. You will pay 7.2 per cent, up to a maximum of € 2,248 per annum. Your employer or benefits office will reimburse you for this contribution.

If you have to pay your contribution yourself, because your benefits office does not reimburse you for the contribution or because you are not employed, you will pay 5.1 per cent, up to a maximum of € 1,592 per annum.

If you live abroad and are insured under the exceptional medical expenses insurance scheme (AWBZ), you will pay the same percentage as a person living and working in the Netherlands. Furthermore, the situations in which you are or are not entitled to a reimbursement from your employer will be the same.

Where can you find more information?
Further information (in Dutch) on the health care allowance can be found on: www.toeslagen.nl .
Further information on the Health Care Insurance Act can be found on the following websites:

  • www.postbus51.nl
  • www.denieuwezorgverzekering.nl
  • www.cvz.nl
I am exempt from Dutch Income Tax. Do I need to file or declare my income (tax) to the Dutch Tax Office?

If the Dutch Tax Office sends you an invitation to file your income (tax), you are required to follow-up on their request. Your income tax exempt status will not be affected if your file your income tax. If you have not received an invitation to file your income tax, you may still be required to declare your income to the Dutch Tax Office. This could be the case if your received an allowance, for which the Dutch Tax Office needs to determine your actual (world) income for the calendar year for which you received the allowance. You will receive a form from the Dutch Tax Office to declare your world income or your Not in the Netherlands taxed income (NiNBI). No action is required from you until you receive an invitation from the Tax Office

Income from other activities

The income from other activities is taxed in Box 1 and consists of all the revenue from other activities minus the corresponding deductible expenditure. Revenue from other activities includes all types of revenue other than wages and profits from business activities. The following are some examples:

  • revenue from freelance activities;
  • fees for giving lectures;
  • considerations paid to local council members;

Income from other activities also includes income from certain forms of asset capitalisation, such as making an asset - e.g., a building or money - available to certain (legal) persons.

On the whole, the income from other activities is determined in accordance with the rules applicable to profits from business activities.

Income from savings and investments

Box 3 concerns your capital. This is the value of your assets minus the value of your liabilities. Assets may include savings, investments and valuable objects. Some assets are exempt or fall into a different box, e.g. your owner-occupied property that is your principal residence, or your shares that are part of a substantial interest. In general, liabilities that were not assumed for the purchase, maintenance or improvement of an owner-occupied property can be deducted from the capital in Box 3.

Examples of assets:

  • savings;
  • properties that are not your principal residence, such as a second home or a building let out;
  • shares and other securities, provided that these do not fall in Box 2;
  • annuity insurance for which the premium cannot be deducted;
  • capital sum insurance that is not linked to the owner-occupied property;

Examples of liabilities:

  • personal loans;
  • continuous credit, or a mortgage not used towards the owner-occupied property that is your principal residence;

Please note:
In respect of liabilities, a threshold applies. The first € 2,800 in liabilities is not deductible from the capital in Box 3. For partners, this threshold is € 5,600. Certain assets and liabilities are disregarded for the purpose of Box 3. For more information, please refer to Assets and liabilities not falling in Box 3.

Tax-free allowance
All taxpayers are entitled to a tax-free allowance in Box 3. This is a fixed amount that is exempt from taxation. The tax-free allowance is € 21,139 per taxpayer. In addition, the following rules apply:

  • If your capital does not exceed € 21,139, it will be entirely free of tax;
  • If you are 65 or older, the tax-free allowance may be increased by the elderly person's allowance;
  • If your capital exceeds the tax-free allowance, only the part in excess of the exemption will be taken into account in calculating the tax in Box 3;

Calculation of tax
The capital that does not fall within an exemption is the basis for the calculation of the income from savings and investments (Box 3). If you have a partner, you can apportion the capital between you at your own discretion (see Partners). The capital is determined twice a year: on 1 January and on 31 December. A notional yield of 4 per cent is calculated on the capital on the 1 January in a year minus the tax-free allowance (the so-called capital yield tax base): the income from capital assets. This income is taxed at a rate of 30 per cent.

Income tax Rate in The Netherlands

Tax rates in the Netherlands 2017

Combined rates in Box 1 for persons not reached the statutairy retirement age
Taxable income  Tax rate 
Of more than But less than
€ 0 € 19,981 36.55 %
€ 19,982 € 33,790 40.80 %
€ 33,791 € 67,071 40.80 %
€ 67,072  and up 52.00 %

 

Rate Box 2 (income from a substantial interest in a limited company)

Tax rate for income from substantial interest is 25 percent.

 

Rate Box 3 (income from savings and investments)

Box 3 tax rate is assessed against a hypothetical assumed yield. Different from previous years, muliple tax rates for Box 3 are designed to tax income from savings and investments. Expats enjoying the 30 percent ruling can opt to be exempted from taxation in box 3 on savings and investments (outside the Netherlands).

Box 3 wealth tax on savings and investments 2017 
Total asset value Applied tax rate
€ 0 - € 25,000 0 %
€ 25,000 - € 75,000 0.489 %
€ 75,000 - € 100,000 1.617 %
€ 100,000 - € 289,000 0.489 %
€ 289,000 and higher 1.617 %

 

 

Mortgage interest and other deductible expenditure on owner-occupied property (deductible expenditure box 1)

If you took out a mortgage or other loan to fund the purchase, maintenance or improvement of an owner-occupied property the related interest and charges will qualify as deductible expenses of an owner-occupied property in Box 1. These expenses can be deducted over a maximum period of 30 years, which is the most common term of a mortgage. If you took out the loan before 1 January 2001, the 30-year period commences on 1 January 2001. Periodic payments towards a ground lease or building and planting rights can also be deducted. Partners can apportion the balance of the notional rental value and the mortgage interest and other deductible expenditure between them. For more information on partners and the apportionment of income and deductible expenditure, see Partners.

Own home abroad
You may only deduct interest and costs incurred in loans for the purchase, maintenance or improvement of your own home abroad if you opt for tax treatment as a residence of the Netherlands (resident taxpayer). If you opt for this, nearly all the same rules will apply to you as those applicable to Dutch residents. For example, you may deduct (your share of) the interest and costs incurred in a loan for your home. Whether you can deduct these expenses abroad as well is not relevant. It does not matter either in which country you took out this loan.

If your partner can deduct the interest and costs incurred in a loan for your own home abroad, these expenses can no longer be deducted in the Netherlands.

Write-offs and costs for maintenance of an own home are not deductable. These costs have been taken into account in the determination of the amount of the notional rental value for owner-occupiers (eigenwoningforfait).

Tax relief for those with no - or only a small amount of - outstanding mortgage on owner-occupied property
There is tax relief for those with no - or only a small amount of – outstanding mortgage on their owner-occupied property. This deduction can only be granted if the balance of the notional rental value of the property (eigenwoningforfait) after subtracting the deductible costs, such as mortgage interest, is positive. The deduction is equal to the difference between the notional rental value of the property and the deductible costs. When applying this deduction, the addition of the notional rental value may never result in a positive income tax component in Box 1.

Consumer loan rule
If you sell your owner-occupied property and buy another property in 2008, this may affect the deductibility of the (mortgage) interest. This is because you have to take the surplus value of the property sold into account when calculating the amount of outstanding mortgage on the property – i.e., the amount of the principal sum on which the interest is tax deductible – in respect of the new property. The surplus value is the difference between the sale proceeds and the debt on the property sold. This amount is known as the net revenue from the sale of an owner-occupied property. The amount of outstanding mortgage on the new property cannot exceed the purchase price of the new property minus the net revenue from the sale of the old property.

If you do not use the entire surplus value to finance the new property, you may not deduct all the interest and charges. The interest and charges relating to the unused part of the surplus value – the additional amount borrowed – will not be deductible. This part of the loan qualifies as a consumer loan and falls in Box 3.

If you buy a cheaper property, you may still declare the old amount of outstanding mortgage on the old property for an amount not exceeding the purchase price of the new property. The consumer loan rule does not apply to home owners who, before 1 January 2004:

  • entered into an irreversible obligation to sell their owner-occupied property, or
  • purchased a new owner-occupied property;

In all cases, there should be definite contracts of purchase and sale that are binding on the parties involved. However, such contracts may contain the customary dissolving clause, such as a financing arrangement clause.

Example

The purchase price of your new property amounts to € 200,000. The acquisition costs (the property transfer tax and the notary's and estate agent's fees) amount to € 18,000. The total purchase costs of the property will then be € 218,000.

The sale proceeds of your old property are € 147,000. The amount of outstanding mortgage amounts to € 109,000 at the time of the sale. The surplus value will then be € 147,000 - € 109,000 = € 38,000 (the net revenue from the sale of the property). In that case, the maximum amount of outstanding mortgage on your new property will be € 218,000 - € 38,000 = € 180,000.

If you take out a higher mortgage, the interest on the part in excess of € 180,000 will not be deductible.


Home endowment insurance relating to mortgage for owner-occupied property
In the Netherlands, the mortgage taken out to fund the owner-occupied property is often linked to home endowment insurance (e.g., a savings-based mortgage or an endowment mortgage). In that case, the benefits paid under such insurance are used towards the repayment of the mortgage debt. Home endowment insurance is taxed in Box 3, but if the insurance is linked to the owner-occupied property, the interest component of the benefit is taxed in Box 1. The following exemptions may apply to the benefits paid under home endowment insurance relating to an owner-occupied property (Box 1):

  • in the case of annual premium payments over 15 to 19 years inclusive: € 32,500 at maximum;
  • in the case of annual premium payments over 20 years or more: € 143,000 at maximum;

The total exemption can never exceed € 143,000 per taxpayer during the latter's lifetime.

No addition if private use does not exceed 500 kilometres

Your employer is not required to make an addition to your wages if you can prove convincingly that your use of the car for private purposes does not exceed 500 kilometres per calendar year. You can supply this proof in various ways:

  • by means of a balanced kilometre log;
  • if you have been provided with a van and your employer has forbidden you in writing to use the van for private purposes. Your employer should sufficiently monitor your use of the van and impose an appropriate sanction if the ban is not observed;
  • if you have been provided with a van that cannot be used outside working hours, because the van is kept within the locked business premises outside working hours and this is verifiable;
  • under a (collective) arrangement with the Tax and Customs Administration on how your employer monitors your private use;
  • by means of a 'Statement of no private use of company car' in combination with a balanced kilometre log or another type of proof;
  • by means of other types of proof (under the doctrine that evidence can be provided by all legal means available), for instance a Black Box;

Kilometre log

The kilometre log should contain the following details:

  • the make of the car;
  • the model of the car;
  • the registration number of the car;
  • the period during which the car was available to you;

 

For each journey you must specify:

  • the date;
  • the initial and final mileometer reading;
  • the address of departure and the address of arrival. If you drive to a meeting from your place of work and back again, you should write down the addresses of arrival and departure for both the outbound journey and the return journey;
  • the route you followed, if this is different from the most customary route;
  • whether this is a private journey or a business journey;

 

The correctness of a kilometre log may be verified on the basis of, for example, office diaries, order notes, garage bills and electronic route planners. We recommend that you retain the kilometre log and this information, because the Tax and Customs Administration may ask you to produce them.

Alternatively, an adequate kilometre log may be kept with the aid of Black Box systems. These are automated registration systems that support the kilometre log. They accurately record the number of kilometres driven in the car. The written reports based on these records often specify each individual journey. In this respect, the Black Box may help reduce the administrative burden, because a multitude of journey details are recorded automatically.

The driver indicates himself whether the journey is a business journey or a private journey. Therefore, a relationship between the report and other documents (diaries and the like) will still be necessary, as is also the case with a manually kept kilometre log.

The totality of reports and underlying documents constitutes the (verifiable) kilometre log that serves as proof of the actual use.

Statement of no private use of company car

If your private use of the car will not exceed 500 kilometres per calendar year, you may apply for a Statement of no private use of company car (Verklaring geen privé-gebruik auto) from the Tax and Customs Administration. You submit a copy of this statement to your employer, who will then be able to omit the addition. You should always be able to prove convincingly to the Tax and Customs Administration that your private use of the car did not exceed 500 kilometres. You can do this by means of – for instance – a balanced kilometre log.

If you are unable to supply the proof, the Tax and Customs Administration will issue you with a retrospective assessment for the wage tax/national insurance contributions owed and the income-related contribution towards the health care insurance scheme. The retrospective assessment may be increased by the assessment interest owed and, where applicable, a penalty.

The statement is valid for an unlimited period. If there is a change in the circumstances under which you applied for the statement, you should notify the Tax and Customs Administration as soon as possible. In that case, your statement will be revised. The Tax and Customs Administration will inform your employer of the change. Your employer will subsequently make the addition.

You are not required to apply for a statement in the following situations:

  • Your employer has made a collective arrangement with the Tax and Customs Administration. You can check this with your employer;
  • You drive a van that you cannot use outside working hours, because the van is kept within the locked business premises outside working hours and this is verifiable;
  • You drive a van and your employer has forbidden you in writing to use the van for private purposes. Your employer sufficiently monitors your use of the van and will impose an appropriate sanction if the ban is not observed;
  • Because of the nature of your work, you and one or more of your colleagues constantly take turns in driving the van, and it is difficult to determine to which of you the van has been made available for private purposes. The private use will be taxed on the part of your employer via a final levy. You can check this with your employer;
  • You are driving a van that is suitable (nearly) exclusively for the carriage of goods. For example, this may be a van that only has a driver's seat and in which the attachment points of the passenger's seat have been ground down or welded shut;
  • You are driving a car that is equipped, and is recognisable as such, for use by the police or the fire brigade, for transporting sick and injured persons, for transporting mortal remains, for transporting prisoners, for transporting sick or injured animals or for securities transports;
Offsettable losses from employment and home ownership (deductable expediture Box 1)

If your income from employment and home ownership is negative in a particular year, you report a loss in Box 1 in that year. On certain conditions, such a loss can be offset against positive Box 1 income from another year. You cannot offset the loss against positive income in another box.

Personal allowance (general deductable expenditure)

The personal allowance is an addition of various types of expenditure. This allowance can be offset against the income in the 3 boxes. You are entitled to all personal tax allowances if you satisfy the relevant conditions. The personal tax allowances reduce your income before calculating the tax due.

  • you opt for resident taxpayer status;
  • you do not opt for resident taxpayer status;

 

Personal allowance items
A personal allowance is involved if one or more of the following items apply to you:

  • alimony paid and other expenditure on maintenance;
  • losses on loans to new businesses ('Agaath' loans);
  • cost of living of children younger than 30;
  • medical expenses and other extraordinary expenditure;
  • expenditure on weekend visits by handicapped children of 30 years or older;
  • educational expenses;
  • donations;
  • expenditure on listed buildings situated in the Netherlands;

 

How do you offset your personal allowance?
You can offset the personal allowance against the income in the three boxes, provided that your offsetting the personal allowance does not reduce the income in a particular box to less than zero. There is a fixed order of offsetting:

  • You deduct the personal allowance from your income from employment and home ownership (Box 1);
  • If the allowance exceeds your Box 1 income, you offset the excess against the income in Box 3;
  • You then deduct any remaining amount from your income in Box 2;

If it should be impossible to offset the entire amount, the remainder can be carried forward to the next financial year.

Resident taxpayer status

If you live in the Netherlands, you must state your complete worldwide income in your tax return. Your income from abroad is also part of your worldwide income (for example income from employment or foreign property).

Opting for resident taxpayer status

Do you live abroad but do you have income in or from the Netherlands? Or did you not live in the Netherlands for the whole year? In that case, you can opt to be treated as if you have a resident taxpayer status for the whole year. If you use this right of option, you also state your worldwide income in the Netherlands.

Double tax relief

The fact that you have to state your income from abroad does not always mean that you have to pay income tax on this in the Netherlands. If the right to levy taxes according under national and international regulations is assigned to another country than the Netherlands, you do not owe any income tax on that income in the Netherlands. In order to avoid your having to pay income tax in several countries, you are entitled to an income tax relief in the Netherlands. This is called double tax relief.

Roll-over scheme (foreign pre-incorporation profit scheme)

The amount of the double tax relief cannot be more than the payable income tax in the relevant box. This could mean that certain deductible items, such as the mortgage interest connected with your owner-occupied home, will not result in a tax advantage. For these types of situations, there is the roll-over scheme. By means of a decision, we determine the amount of foreign income which is automatically included in the calculation of the relief in a following year. You may not include this transferred amount once again in your tax return in that year.

The roll-over scheme is applied to each box. Therefore, it is possible that you will receive a decision for income in box 1 and another decision for income in box 3.

Example of how the roll-over scheme works in box 1
Calculation of the double tax relief in box 1: your taxable income from work and home (box 1) is € 22,690. In 2010, you owe income tax on this amounting to € 944.

Your income consists of income from employment in Germany amounting to € 27,226 and negative income from your owner-occupied home amounting to € 4,536. You will owe tax in Germany on the German income from employment and will be entitled to double tax relief in the Netherlands. The double tax relief amounts to € 27,226/€ 22,690 x € 944 = € 944, as the maximum amount of the relief is € 944.

In this example, the negative income from your owner-occupied home does not lead to a tax advantage. That is why this amount (€ 4,536) is reserved. Should you have income in box 1 in the future on which you have to pay income tax in the Netherlands, a double tax relief will still be given on the reserved amount and you will receive a tax refund. This is called the roll-over scheme or foreign pre-incorporation profit scheme.

Please note
The tax treaties do not include any rules on the levy of national insurance contributions. Other (international) rules apply to this.

Social security and cross-border employment and enterprise

When you work or run a business abroad there are issues to consider besides in which country your income is liable to tax. It is also important to know in which country you are covered by social insurance. You can answer this question by looking at the relevant international agreements made on this point.

Most issues involving social security in cross-border work situations are covered by European Union regulations (EC Regulation 1408/71). Additionally the Netherlands has separate agreements with many countries. One of the purposes of such agreements is to prevent you from being covered by more than one social security system or none at all when you work or have a business abroad. As a general rule the social security system of the country in which you work is the one that applies to you. However, there are a number of exceptions to this rule. For example, other rules apply if your employer sends you to work abroad temporarily (secondment) or if you work in two or more countries.

Please note:If you live abroad and intend to work in the Netherlands, find out what the consequences will be for your social security. Also, if you are going to receive social insurance benefits from the Netherlands, it is important to find out how this will affect your social security.

Social security when working and doing business abroad

Do you live in another country than the country in which you work? Or do you receive benefits from another country than the one you live in? When working and doing business abroad, not only does the question of which country your income is taxed in play a role, but it is also important to know in which country you are covered by social insurance.

Social insurance schemes
Social insurance schemes are insurances that provide income or allowances in certain situations. This might be unemployment benefit or study finance but might also be reimbursement of medical expenses.

National insurance schemes

The national insurance schemes form part of the social insurance schemes. For these national insurance schemes, you have to pay contributions. This contribution is calculated on your contribution base. The national insurance schemes are:

  • General Old Age Pensions Act (AOW)
  • Surviving Dependants Act (Anw)
  • Exceptional Medical Expenses Act (AWBZ)
  • General Child Benefit Act (AKW for which no contribution is collected)

The national insurance contributions are deducted from your wage along with the wage tax, or levied along with the income tax in 1 tax assessment.

In certain cases, it could be that you are not covered by the national insurance schemes. In that case, you do not have to pay any contributions but you also do not have the right to the tax credit for the national insurance contribution.

Please note!
Always work out for yourself what the consequences of the social insurance are for you and your partner. This especially applies if you receive pensions or social insurance benefits from abroad. You may be eligible for exemption from certain national insurances. If you are entitled to an exemption, you have to send in a request for it yourself.

New legislation as since 1 May 2010

Social security in Europe will be subject to new legislation with effect since 1 May 2010. The key principle is that you are insured in the EU country in which you work, even if you live in another EU country. Do you work in 2 or more countries? If so, you can be insured in another EU country as since 1 May 2010. If you have 1 employer, you will from now on be insured in the country where you live if you work at least 25% of your time in that country. Otherwise, you are insured in your employer's country of establishment. Is your employer established in the country in which you reside? If so, you are insured in your country of residence. You are also insured in your country of residence if you work for 2 employers in different EU countries.

Transitional arrangement

Are you already working in an EU country and insured in another EU country under the new rules with effect since 1 May 2010? Provided that your situation remains unchanged, you will remain insured in the country where you are now living until 1 May 2010.

Tax credits

Tax credits

The following tax credits may be applied on your taxable box 1 income:

Personal tax credit (max for lower incomes) € 2,203
Personal tax credit (max for higher incomes) € 1,342
Personal tax credit for partner without income born after 1 January 1963 € 1,175
Personal tax credit for partner without income born before 1 January 1963 € 2,203
Labour tax credit (max for lower incomes) € 2,220
Labour tax credit (max for higher incomes) € 184

 

If you have children additional tax credits can apply. There are also other specific tax credits depending on your situation but the above are the common tax credits.

Everyone has the right to credits on taxes to be paid: the general tax credit. On top of that, you may receive additional credits.

Tax credits consist of a national insurance contributions component and a tax component (not the elderly person’s tax credit and the single elderly person’s tax credit). The component that you will receive depends on your situation.

The right to the national Insurance component
If you have compulsory insurance in The Netherlands, then you are entitled to the national insurance component of your tax credit. If you are not insured for national insurance, then you are not entitled to this. If you want to know when you are or are not insured and how the national insurance is levied, please see The levying of national insurance contributions.

The right to the tax component
If you live abroad and are a taxpayer in The Netherlands, then you are not automatically entitled to the tax component of your tax credit. You are only entitled to this if you choose to be treated as a resident taxpayer, or if you are a resident of Germany, Belgium, Suriname, the Dutch Antilles or Aruba.

  • Allowance for German residents;
  • Allowance for Belgian residents;
  • Allowance for residence of Suriname, the Dutch Antilles and Aruba;

You are always entitled to the tax component of the employed person’s tax credit, even if you do not choose to be treated as a resident tax payer. You must then satisfy the criteria for the employed person’s tax credit.

Composition of tax credits
In the Netherlands, the Tax and Customs Administration levies the income tax and the national insurance contributions for AOW, ANW and AWBZ as one aggregate amount. For this reason, the tax credits relate to both income tax and national insurance contributions.
Maximum size of the tax credit

The tax credit cannot exceed the combined income levy. The combined income levy is the total amount of taxes and national insurance contributions that you owe on the taxable income in Boxes 1, 2 and 3.

The levy of national insurance contributions

If you do not live in the Netherlands but receive income from the Netherlands, you will be compulsorily insured for Dutch national insurance in some cases, but not in others. This depends on the type of income you receive from the Netherlands. If you are compulsorily insured in the Netherlands, you will remain covered by the Dutch social security system. In that case, you have to pay contributions on your income.

In the following situations you will be compulsorily insured under all the national insurance schemes:

  • Your income from activities performed in an employment in the Netherlands is subject to wage tax, and you do this work only in the Netherlands. In that case, you will remain insured also in the event that your work is temporarily interrupted on account of illness, maternity leave, an accident, unemployment, paid leave, strike or exclusion;
  • You do not live in the Netherlands, but do your work as a self-employed person only in the Netherlands;
  • You work on a means of transport (including inland shipping and Rhine navigation);

If you work on a means of transport, a number of additional conditions apply. You may also fall into this category if you are a crew member on an ocean-going vessel. Your employer can tell you whether this is the case. This concerns the following two conditions:

  • You do not work in your country of residence alone;
  • You do not work for a foreign branch or a foreign permanent representation of a Dutch business;

 

Please note:

Also in a number of special situations you will remain insured in the Netherlands, for instance if you have been posted abroad in a military capacity, or if you have been seconded and possess a statement of secondment based on an international social security regulation.


Only insured for AWBZ
Even if the aforementioned situations do not apply to you, it may still be possible that you are insured under the AWBZ scheme (and not under the other insurance schemes). You may be insured for AWBZ if you meet either of the following conditions:

  • You are insured in the Netherlands under the Compulsory Health Insurance Act;
  • Based on international regulations, you are entitled to medical care in your country of residence, the expenses of which are borne by the Dutch Health Insurance Fund (Ziekenfonds). For example, this may be the case if you moved abroad when you retired and continue to receive pension payments or benefits from the Netherlands;
Three types of income: the box system

The Dutch tax system distinguises 3 types of income for tax purposes. Each type of income is referred to box 1, 2 or 3 and carries it's own tax rate. The box 1, 2 and 3 income categories are:

  1. Box 1: taxable income from employment and home ownership
  2. Box 2: taxable income from a substantial interest
  3. Box 3: taxable income from savings and investments

 

Box 1 income category is comprised of: 

  • Wages, pension payments, social benefits
  • Income from other activities
  • Company car
  • Profits from business activities
  • Owner-occupied property
  • Negative expenditure on income insurance
  • Negative personal allowance
  • Periodic benefits

 

Box 2 income category is comprised of: 

  • Income from shares and profit-sharing certificates that are part of a substantial interest
  • Income from the disposal of these shares and profit-sharing certificates

 

Box 3 income category is comprised of: 

  • Income from savings and investments 

 

See also FAQ Income Tax Rates in the Netherlands for applicable tax rates. 

Wages, pension payments, social benefits

Wages, pension payments and social benefits are taxed in Box 1. When effecting payment, the employer/benefits agency usually withholds wage tax and national insurance contributions (together known as payroll tax), as well as the income-related contribution towards the health care insurance scheme. The payroll tax is offset against the income tax and national insurance contributions eventually owed. In determining the amount of payroll tax owed, the following tax credits – where applicable – are already taken into account:

  • General tax credit;
  • Employed person's tax credit;
  • Young disabled person's tax credit;
  • Elderly person's tax credit;
  • Single elderly person's tax credit

For more information, please refer to Tax credits.

From 1 January 2006, the benefit entailed by the private use of a passenger car or van made available by your employer will be part of your wages. Further information can be found under 'Company car'.

What is Blue Tax Return?

At Blue Umbrella it is simple, straightforward and completely online. Even better, it is affordable at a flat fee for € 125 per income tax return filing (€ 175 for couples). No unpleasant surprises of billing extra hours. No matter how complex your non-business personal tax situation is.  We process all types of Dutch income tax return filings for the same price.

After you have submitted your online tax questionnaire, we will make a assessment and upload the result in a tax refund report on your MyBlue Page. After you have agreed the report we will sent it to the Tax office.

What is the 30 percent facility?

If you come to work in the Netherlands, you are possibly confronted with extra costs, so-called extraterritorial costs. Your employer may grant you a free (untaxed) reimbursement for the extraterritorial costs that you incur. Your employer may also provide you with 30 percent of your wage, including reimbursement, tax-free. This facility is known as the 30 percent facility. For this, it is not necessary to prove that expenses have been incurred.

Conditions

You need the Dutch Tax Office's permission to apply the facility. To obtain this, you and your employer should submit an application. You are eligible for this allowance if you meet a number of conditions.

Which country can levy tax on your income? 183-days arrangement

Which country can levy tax on your income is determined by bilateral tax treaties. This to avoid double taxation. If no bilateral tax treaty is on please, the Dutch Tax Office decides if it levies tax on your income.  

Most tax treaties determines that the country in which you work (work country) can levy tax on your income.  If you work in the Netherlands, you are liable for Dutch income taxation, unless:

  1. You reside less than 183 days in a calendar year in the Netherlands;
  2. Your employer is not based in the Netherlands;
  3. You are not keeping a representative office (i.e. you do not a defined desk space on behalf of your employer in the Netherlands) 

 

Secondment of an Employee

Under a Secondment of an Employee arrangement, you do usually not meet the 2nd condition of the 183-days arrangement. The Dutch Tax Office usually considers a (temporary) transfer to a company in the Netherlands under a secondment arrangement as a Dutch employee. The Dutch Tax Office than levies tax the income.  

The following three conditions form the basis for this consideration by the Dutch Tax Office:

  1. The employee working (temporarily) for the Netherlands-based company adheres to it's instructions;
  2. The Netherlands-based company benefits from (and is liable for) the results generated by the secondment arrangement
  3. The original (non-Dutch) employer fully compensated for employment costs by the Netherlands-based company

 

Young disabled person's tax credit

In 2014, you are entitled to the young disabled person's tax credit if you:

  • receive benefits under the Invalidity Insurance (Young Disabled Persons) Act (the so-called Wajong benefits);
  • are entitled to but do not receive Wajong benefits, because you receive a different type of benefit or earn income;

The young disabled person's tax credit amounts to € 708 in 2014.

Can I be fired when I am pregnant?

You can’t be fired because you are pregnant, nor during your leave, nor within the first six weeks after your maternity leave. You can only be made redundant in very special cases.

Can I contact the IND to get an employer’s declaration or a sponsor declaration?

These forms cannot be obtained independently. They are included as an annex with the form for renewal (application for renewal of residence permit). You can download these forms or order them through the website www.ind.nl.

Contracts

Because the legal rights and obligations differ per type of contract, you have to consider what option suites you most. To help you make this decision, the basic principles of the different contract options are explained below. For more information go to the section about types of agreements.

There are four rather common labour contract options. These are:

  1. Temporary labour contract;
  2. Permanent labour contract;
  3. Contract with an employment agency;
  4. Self Employed

Temporary labour contract
A temporary contract has a starting date and an ending date. The contract will end on the agreed date without a dismissal procedure. We strongly advise you to make sure that you get a contract in writing, although a verbal agreement is also valid. The employer has the obligation to inform you about the main issues covered in the labour contract in writing within one month after the commencement of the contract. Within the legal limits, employers and employees are free to decide what will be covered in the labour contract.

Trial period
The trial period is a very common part of a (temporary) contract with the employer. A trial period will apply for both parties and needs to be agreed in writing. If the duration of the temporary contract is less than two years, the maximum trial period is one month. Exceptions can only be made when a Collective Labour Agreement agrees to this. The legal maximum trial period is never any longer than two months. An extension of this period is not possible.

Term of notice
A temporary labour contract will end automatically and legally on the date agreed. This means that there is no dismissal procedure involved. A different situation occurs if both parties or one of them want to end the contract before the agreed date. In this case, the option for termination of the contract before the final date has to be part of the contract. If the employer wants to end the contract before the date agreed, he or she needs to follow a legal dismissal procedure. In this case, it is advisable to contact the local Employment Office (WERKbedrijf or CWI) to get further information.

Repeated contracts with the same employer
If four temporary contracts with the same employer have been agreed within less than a three-month break between each contract, the rules for a permanent contract will start to apply. If this is the case, please contact the local office of WERKbedrijf or CWI for more information.

Permanent labour contract
The most important difference between a temporary labour contract and a permanent labour contract is the fact that a permanent labour contract has no ending date. This means there is no indication of any intention to limit the duration of the contract - such as 'for the duration of the project'. Hence, and unlike temporary labour contracts, there is no mention of an ending date of the contract in a permanent contract. Also the 'term of notice' will be different for a permanent contract, since your legal position is different. The differences concerning termination of a permanent labour contract are explained below:

A permanent labour contract can be ended by one of the parties. The legal terms of notice need to be respected.

The rules are different for employers and employees. The employee has the legal right to end the contract without a procedure, but he or she has to respect the legal and agreed period, which usually is a one-month notice minimum.

The employer needs to apply for a dismissal permit. The term of notice depends on the duration of the contract on the day the employer applies for the dismissal permit. We advise you to contact the local office of WERKbedrijf or CWI for more information if you are confronted with this situation. 

Contract with an employment agency
The contract with an employment agency (uitzendbureau) differs fundamentally from a contract with an employer as described above. In the temp construction the employment agency is your legal employer while you work in a company that hires you from the employment agency. In particular, your protection against dismissal during a certain temp period is not regulated. This on the other hand means that you and the company you are working for can terminate the employment at any given time during the agreed employment period. Employment agencies have their own Collective Labour Agreement. There is an 'Allocation of Workers by Intermediaries Act' that regulates issues related to employment agencies e.g.:

  • Employment agency employers are prohibited from charging temporary workers money (or any other consideration) for being given temporary work.

Employment agencies must inform temps in writing about the working conditions at the place of work in advance.

Health Care Benefit

Do you have Dutch health care insurance? Then you may be eligible for a health care benefit. You must be over 18, have the Dutch nationality and your income may not be too high. Do you reside in the Netherlands but work abroad, and do you not have Dutch health care insurance? Then you are not eligible for a health care benefit. Would you like to apply for a health care benefit? You can do this at the Dutch Tax Administration.

Health Insurance

Everyone in the Netherlands is obliged to take out health insurance, even if you are only living and working temporarily in the country.

Foreign health insurance
It is often recommended that during the initial period of your stay in the Netherlands, you keep the insurance you had in your country of origin. This is on the condition it covers your possible costs here, so be sure to confirm that in advance.

If you are a resident of the Netherlands, you are, in principle, obliged to take out Dutch health insurance,even if you are already insured back home. This ensures that every person is protected against the financial risks of illness and hospital admission. You are free to chose your own health insurer(zorgverzekeraar)offering the basic package (basisverzekering) and are allowed to change insurers once a year. To register for health insurance, you will require a social security number(burgerservicenummer or BSN).

Please note: If you are not covered by Dutch health insurance, you risk being fined and billed retroactively for the months you were not insured.

Health coverage
The foundation of the Dutch healthcare system is the mandatory basic health insurance policy (basisverzekering). The coverage of this standard package is determined by the government and includes medical care by specialists, GPs and midwives, hospital care, medication, rehabilitation, dental help for persons younger than 22, mental healthcare and necessary medical help during a holiday or business trip abroad.

Health insurance companies have an obligation to accept everyone for this package, irrespective of gender, age and health. Health insurance companies also offer additional premium plans (aanvullende verzekering). These may cover things such as physiotherapy, spectacles, dental care for persons 22 years and older, and alternative medicine. You will always have an excess or deductible (eigen risico) of at least €150.

You can take out health insurance with any one of a number of insurance companies. Check whether your employer offers corporate health insurance. For a comparison of insurances and prices, consult the following website (only in Dutch): www.kiesbeter.nl.

More information
If you would like to know more about your specific situation, please contact the:

  • College for Health Insurances at  +31 (0)20 797 8555 for questions relating to health insurance
  • Sociale Verzekeringsbank at  +31 (0)20 656 5352 for questions relating to social security

More information on the healthcare insurance system in the Netherlands can be found in the Ministry of Health's English brochure (click here).

 

In the Netherlands there are two statutory forms of insurance that are relevant to the field of medical care and nursing:

  1. the Zorgverzekeringswet (Zvw, Health Insurance Act) covers the costs of 'normal' medical care such as G.P. visits, hospitalisation and pharmacy prescriptions. The Zvw is also referred to as basic insurance;
  2. the Algemene Wet Bijzondere Ziektekosten (AWBZ, General Exceptional Medical Expenses Act) covers the costs of exceptional and in particular expensive care, such as long-term nursing and home-care. The AWBZ is one of the national insurances in the Netherlands.

As a resident in the Netherlands, in principle you will automatically be insured for the AWBZ and you will be obliged to take out basic insurance. This can be obtained with one of the many health insurers.

You will pay a percent contribution for both the Zvw and the AWBZ, for example, via a deduction from your wages or via a tax assessment. In addition to this you will also pay – directly to the health insurer – a flat-rate contribution for the Zvw for yourself and for every co-insured family-member who is older than 17 years of age; the size of this contribution varies per health insurer. Lastly, per calendar year there is a €150 personal risk that applies for every insured person.

If you have too little income to be able to pay the full Zvw-contribution, then you can apply for financial compensation from the Dutch Tax Authorities: the so-called care allowance.

Exceptions
You may come from a country with which the Netherlands has entered into an agreement in the field of social security; this applies in any case to all EU countries. In this case your personal circumstances may be such that you are not eligible for direct insurance via the Zvw and the AWBZ. For example, because you still have statutory health insurance in your former country of residence. The health insurer with whom you register can provide you with more information about this.

I am new in the Netherlands. Where do I register?

Registration procedures with the municipality varies per town of city. To register with The Hague, for instance, you are required to file with the Immigration Office (24 Stadhoudersplantsoen). Other municipalities may handle the registration procedure at the city hall.

I want to emigrate / leave the Netherlands. Is the IND the organisation I have to deal with?

IND only deals with people that immigrate to the Netherlands. Contact the embassy of the country you want to move to

Is my partner/child allowed to work in the Netherlands?

Since 13 April 2005, the rule for family members of a highly-skilled migrant – like the highly-skilled migrant him/herself – is that they don’t need a working permit to work in the Netherlands. Visit the website www.ind.nl for more information.

Maternity Leave

Maternity leave is regulated in the Netherlands. You are entitled to 16 weeks paid maternity leave, starting 4-6 weeks before your due date (you must stop working a minimum of 4 weeks in advance). This extends to 10 weeks after the birth, dependent to a certain degree on the child being born on time. Your partner has the right to two days paternity leave. Parental leave is also regulated. Both you and your partner may take unpaid parental leave.

Protocol Guide for embassy and consular staff

The Protocol Department of the Ministry of Foreign Affairs publishes a Protocol Guide for missions accredited to the Netherlands to help recently arrived embassy and consular staff with questions about their stay in the Netherlands.

Written in cooperation with other government bodies, the 2011 edition contains information on protocol matters, such as the arrival of members of missions and their privileges and immunities. It also answers frequently asked questions, such as: 'How do I apply for an identity card?' 'What should I do if I lose my identity card?' 'What happens if my family comes to the Netherlands?' 'What taxes am I exempt from?' 'What are my immunities?' and 'What happens if I want to import my car or buy a new one?' A list of organisations that can be approached directly to sort out certain matters is at the end of the guide.

Protocol Guide for International Organisations

The Protocol Department of the Ministry of Foreign Affairs publishes a Protocol Guide for international organisations in the Netherlands to help recently arrived staff of international organisations with questions about their stay in the Netherlands.

Written in cooperation with other government bodies, it contains information on protocol matters, such as the arrival of members of missions and their privileges and immunities. It also answers frequently asked questions, such as: 'How do I apply for an identity card?' 'What should I do if I lose my identity card?' 'What happens if my family comes to the Netherlands?' 'What taxes am I exempt from?' 'What are my immunities?' and 'What happens if I want to import my car or buy a new one?' A list of organisations that can be approached directly to sort out certain matters is at the end of the guide.

Qualifications and diploma validation

If you have obtained your diploma in another country and want to work in the Netherlands, you probably need to know what a particular credential is worth in terms of the Dutch system. The Netherlands has two centers of expertise in the evaluation of international credentials: Nuffic (for higher education) in The Hague and Colo (for vocational education) in Zoetermeer.

Depending on your plans on how to make use of your qualifications in the Netherlands, you can use either of these centers. It is therefore highly recommended that you first call the Information Center for Credential Evaluation (IcDW) for general advice. The centers of expertise have set up this Information Center.

When you are entitled to live and work in The Netherlands and you are officially registered as a jobseeker at a local office of UWV WERKbedrijf, the WERKbedrijf can support you in getting the necessary answers regarding your qualifications and diploma validation.

Nuffic
Nuffic's full name is Netherlands Organization for International Cooperation in Higher Education. Within Nuffic, the Department for International Credential Evaluation is responsible for comparing education and assessing diplomas. Nuffic's work also involves the evaluation of credentials and competencies. The aim of Nuffic's work is to remove obstacles standing in the way of students and workers who wish to be internationally mobile and either enter or leave the Netherlands.

Nuffic also carries out projects in the field of credential evaluation, and - on the basis of international treaties - has been appointed by the education ministry to act as national information centre regarding matters of recognition. It does this in two international networks: the European Commission's NARIC network (National Academic Recognition Information Centres) and the network of the Council of Europe and UNESCO/CEPES known as ENIC (European National Information Centres on Recognition and Mobility).

Contact information:

Monday to Friday from 09:00 to 12:30 hrs at the Information Centre for Credential Evaluation (IcDW)
P.O. Box 7338 2701 AH Zoetermeer, the Netherlands, telephone +31-79 3217930, fax +31-79 3217929
E-mail: info@idw.nl
www.nuffic.nl
Colo
Colo is the association of national bodies responsible for vocational training for the private sector. Colo represents 18 bodies, or 'knowledge centres', each of which is organized around one sector of business or industry.

Colo also has its own department for international credential evaluation, which is a centre of expertise on diplomas, certificates and other qualifications awarded in other countries. Colo assesses these qualifications by comparing them to the Dutch qualifications that can be acquired through vocational and adult education. This service has an official character. The Dutch Ministry of Education has appointed Colo as the national information centre regarding the EU Directives for a General System, which regulates access to certain professions within the member states of the EU and the EEA. Colo's credential evaluation department belongs to a number of international networks which foster mobility and transparency in qualifications. These include Netref (European Network of National Reference Structures for Vocational Education).

Contact information:

E-mail: www.colo.nl or info@idw.nl
www.idw.nl

VAT Rates

If a supply is not exempt and is not subject to the reverse-charge mechanism either, it is automatically taxed at one of three possible rates: the 0 percent rate, the 6 percent rate or the 21 percent rate (as of 1 october 2012).

0 percent rate

The 0 percent rate applies to entrepreneurs who do business outside the Netherlands. This usually involves the supply of goods to other countries. See under "You are performing an intra-Community supply from the Netherlands" and "You are exporting goods from the Netherlands" to learn in which cases you may apply the 0 percent rate. By applying the 0 percent rate you apply a kind of exemption, but are still entitled to deduction of input tax.

6 percent rate

The low rate of VAT is 6 percent. This rate applies, for example, to the supply, import or intra-Community acquisition of:

  • food, drink (excluding alcoholic beverages) and the ingredients used in their production
  • cattle, sheep, goats, pigs and horses
  • medicines
  • books, daily newspapers and magazines
  • agricultural and horticultural seeds
  • ornamental plants

The following services are also taxed at 6 percent:

  • passenger transport;
  • paintwork on dwellings that are over 15 years old
  • hairdressing services
  • bicycle repairs
  • the letting of holiday homes
  • performances by performing artists
  • the granting of admission to:
    - circuses
    - travelling fairground attractions
    - musical and theatrical performances
    - sports events

21 percent rate (as of 1 october 2012)

In all other cases, you should charge VAT at the basic 21 percent rate. In other words, the 21 percent rate applies to supplies that are not exempt (see under VAT Exemption), not subject to the reverse-charge mechanism (see under VAT Transfer Regulation), not zero-rated and not taxed at 6 percent.

What is a pronouncement of undesirability?

The Immigration and Naturalisation Service (IND) is entitled, on behalf of the State Secretary of Justice, to pronounce a foreign national undesirable pursuant to Article 67 of the Aliens Act 2000. A pronouncement of undesirability is an (administrative) measure for the purpose of preventing foreign nationals who are not or are no longer permitted to stay in the Netherlands from entering or remaining in the country.
In most cases, this concerns foreign nationals who have committed an offence.
The pronouncement of undesirability makes it an offence for the foreign national to reside in or return to the Netherlands without authorisation.

Balancing of interests
The assessment (on the part of the IND) of whether a foreign national will be pronounced undesirable takes into account the interests of the parties involved. In this respect, national interest (public order and national security) is examined on the one hand, and the interests of the foreign national and (if applicable) his or her family on the other hand. 

Immediate effect
A decision in favour of a pronouncement of undesirability is issued to the foreign national in person by the police (together with a leaflet regarding pronouncement of undesirability). If it is not possible to issue the decision in person, the decision shall in any event be published in the Dutch Government Gazette. 
A decision in favour of a pronouncement of undesirability shall take immediate effect. The foreign national who has been pronounced undesirable must immediately leave the Netherlands of his or her own accord (obligation to leave the country independently). 
Any foreign national who stays in the Netherlands whilst he or she is aware or may reasonably assume that he or she has been pronounced undesirable, is guilty of an offence pursuant to Article 197 of the Penal Code and may be sentenced to a maximum of six months’ imprisonment.
Once the prison sentence has been served, the foreign national who has been pronounced undesirable may be removed, if the identity and nationality of the foreign national have been established and (replacement) travel documents are available.
A foreign national may lodge an application for review in respect of a pronouncement of undesirability. The foreign national shall not, however, be permitted to stay in the Netherlands pending the outcome of such an application. If a foreign national has definitively been pronounced undesirable and has left the Netherlands, after a given period he or she may submit an application in writing for the withdrawal of the pronouncement of undesirability.

Where can I apply for a naturalisation application form?

There is no form to apply for Dutch nationality. You have to file a naturalisation petition with your municipality. However, you can order a brochure with general information on the subject through the website www.ind.nl. For general questions, you can also contact our Public Relations department (afdeling Voorlichting) of the IND (Dutch Immigration Service)

Working in the Netherlands

Any citizen of an EEA member country can work and live in the Netherlands, though certain conditions must be met and exceptions might apply. Though there are numerous ways to find jobs, the Internet is becoming the dominant medium. 'Short and businesslike' are the keywords for your CV and application letter. In addition, the candidate's motivation is one of the basic selection criteria for Dutch recruiters. Last but not least: make sure to check if your educational diploma's and degree's are valid in the Netherlands.

Who can apply for jobs in the Netherlands?
EEA nationals
In principle, the EU & European Economic Area (EEA) allow for the free movement of money, goods, services and persons. This means that its inhabitants are allowed to live and work in any other member state. This free movement of persons already exists between most of the member states of the EU/EEA. These are currently: Austria, Belgium, Cyprus, Denmark, Germany, Finland, France, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxemburg, Malta, the Netherlands, Norway, Portugal, Spain, Sweden, United Kingdom, Poland, Estonia, Hungary, Latvia, Lithuania, Slovenia, Slovakia and the Czech Republic.

EEA nationals working in the Netherlands have the same rights as nationals of this country regarding pay, working conditions, access to housing, vocational training, social security and trade union membership. Families and immediate dependants are entitled to join them and have similar rights.

Citizen Service Number (formerly Sofinumber)
In order to work in the Netherlands you need a Citizen Service Number (Burger Servicenummer or, in short, BSN) after January 1st, 2007. This number means you are registered in the tax and social security system. You can apply for a Citizen Service Number at the local office of the Tax and Customs Administration.

If you work in paid employment, your employer will deduct social security contributions and tax from your wage and pay these amounts to the concerned authorities. This payment occurs in advance of the income tax return, which you have to complete once a year. For more information and the addresses of tax offices visit www.belastingdienst.nl or phone 0800 0543 (from the Netherlands) or +31 555 38 53 85 (from abroad).

Residence Permit and Identification
Citizens from EU/EEA member states, do not need a residence permit in order to be allowed to work in the Netherlands. Once you have been in the Netherlands for more than 3 months, you should register with the IND. For more information consult the IND website www.ind.nl . On this website you will find a 'residence wizard' through which you can find out about the rules for residency in the Netherlands for yourself and any family members.

Even if not directly needed, a residence permit can come in handy: sometimes employers ask for it before they enter into a contract with you, banks also ask for it when you open a bank account and other official institutions ask for this document as well. You can apply for a residence permit at the IND office nearest to where you are residing. As of 1 January 2005 everyone aged 14 or older must be able to submit valid identification documents to prove his or her identity. If you are a national of one of the EU member states or of the European Economic Area, you can identify yourself with a passport or an EU/EEA aliens document.

If you are a national of Bulgaria or Romania you are required to apply for a residence permit (proof of lawfull residence).

You are exporting goods from the Netherlands

A transaction is regarded as an export transaction if it involves the shipment of goods to a non-EU destination. The transaction is zero-rated, irrespective of whether the goods are sold to a private individual or an entrepreneur. You are entitled to apply zero-rating only if you have documentary evidence to prove that the goods are actually being exported.

Export declaration

If you are exporting goods, you must declare the transaction to Customs. You may submit an export declaration yourself, but you may also arrange for a customs agent to do so on your behalf. You may also declare the export at a customs office on the EU's external border. For further information, please contact the Tax Information Line. Please note that this is a Dutch-language line.

You are receiving benefits

If you are unemployed and receive unemployment benefits, sickness benefits or disablement benefits, you are entitled to pregnancy and maternity benefits. You apply for these at the Social Security Agency UWV.

You quit your job

If you quit your job you may be eligible for pregnancy and maternity leave. The requirement is that the baby should be due or be born less than ten weeks after you quit your job. You are entitled to sixteen weeks pregnancy and maternity leave.

Your contract expires

If your contract expires during your pregnancy you may be entitled to unemployment benefits. You need to apply for this at the Social Security Agency UWV. The application should state that you are pregnant and a certificate to prove this should be included. You could then be entitled to pregnancy and maternity benefits, which you will receive for a period of sixteen weeks, six weeks before childbirth and ten weeks thereafter. After that you will receive unemployment benefits.