Royalties in the Netherlands

Are you earning income from your creative or intellectual work? Then you may be receiving royalties. In the Netherlands, these are usually taxable, depending on your situation.

What are royalties?

Royalties are payments you receive when someone uses your work or intellectual property. This includes things like books, music, designs, or inventions. Authors, musicians, and designers often receive royalties when their work is sold or used.

Do you pay tax on royalties in the Netherlands?

Yes, royalties are generally taxed in the Netherlands. You usually need to include them in your income tax return and sometimes in your VAT return.

Income tax Box 1 vs. Box 3

Royalties can fall into two tax categories:

Box 1

If you created the work yourself and actively earn royalties, they are taxed as income from work or business. They are added to your total income and taxed at progressive rates.

Box 3

If you receive royalties passively, for example through inherited rights, they are treated as assets and taxed in Box 3.

VAT on royalties

VAT may apply depending on the type of royalty:

Exempt from VAT

Writers, journalists, composers, and some art education activities may be exempt.

0% VAT

Applies when the rights are used abroad.

9% VAT

Applies to performing arts such as music, theatre, and dance.

21% VAT

Applies to most other royalties, such as commercial licensing or merchandise.

Do you need to file a tax return?

In most cases, yes. You will usually need to report royalties in your income tax return and file VAT returns if applicable.

This information is a general overview and not personal tax advice. For your specific situation, it is best to consult a tax professional or the Dutch Tax Office.