Taxes in the Netherlands
As in most countries in the world, the primary sources of tax revenue in the Netherlands are work, sales (VAT) and profit (corporate tax). Residents pay tax on their worldwide income. Non-residents pay tax only on income sourced in the Netherlands.
Income tax
Income tax in the Netherlands is the main revenue source for the state. Tax is levied on income from employment, business ownership and wealth. The tax rates vary depending on the amount and source of income. For more information, see Income tax grouped in three boxes.
Blue Umbrella can help you with your income tax return: for more information click here.
Sales tax
Sales or value-added tax (VAT, or BTW in Dutch) follows EU regulations. Value-added tax is calculated on three classes of goods:
- Foods and essentials (9%)
- Non-foods and luxuries (21%)
- Special goods (0%)
Special goods are:
- Goods that are to be exported
- Goods that are currently in a duty-free zone (eg the harbour)
- Catches of Fish
- Excised goods (imported for personal use, within certain limits)
- International transport of people
VAT collection
VAT is typically collected by the entity that offers the goods or services in the Netherlands. It is reported periodically, usually quarterly, and paid to the Dutch tax office (Belastingdienst) by the collecting entity. The VAT paid on goods or services bought in by businesses can be reclaimed from the Dutch tax office.
Businesses can apply reverse VAT charges for goods or services to move the responsibility for reporting VAT from the seller to the buyer. This system avoids the requirement for businesses to register for VAT in the country into which they sell.
Corporate tax
Businesses based in the Netherlands are subject to corporate tax on their worldwide income. The corporate tax rate (2022) is 15% for taxable amounts of up to €395,000. For taxable amounts over €395,000, a tax rate of 25,8% applies. Under Dutch corporate taxation, profits generated by a business entity that is owned by another company are typically free of taxation. Profits and losses within companies that are part of the same fiscal unit can be offset internally.
We offer tax support for small businesses: view our services and rates here.
Other forms of taxation
Other forms of taxation include property tax, inheritance tax, gift tax, transfer tax, gambling tax, motor vehicle tax and import tax (duties). Property tax is collected by the local authority (municipality). Inheritance tax (successierecht) is charged for inheritances received from Dutch residents. Dutch nationals are considered Dutch residents for a further 10 years after they leave the country. The inheritance tax rate ranges from 10% to 40%. The current rate of transfer tax (overdrachtsbelasting), paid on the purchase of real estate, is 2%. Gambling tax (kansspelbelasting) is 30.1% of any winnings over €449, won in a game of chance.
Allowances
The Dutch tax office (Belastingdienst/Toeslagen) also handles the payment of allowances for specific purposes. You may be eligible for an allowance for formal childcare costs, rent expenses and health care insurance. For more information about allowances, see the section: allowances.
Duties
The import of goods into the Netherlands from outside the European Union is subject to import duties. These can include excise duty, consumption tax, and other levies. The Dutch customs authorities (Belastingdienst/Douane) levy and collect the duty and transfer it to the EU. All EU member states apply duties from the same Common Customs Tariff (CCT) system.
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