Taxes in the Netherlands
Like in most countries in the world, the primary source of tax revenue in the Netherlands is taxation on labor, sales tax (VAT) and profit tax (corporate tax). Residents pay tax over their worldwide income. Non-residents pay tax over income sourced in the Netherlands only.
Income tax in the Netherlands is the main revenue source for the state. Tax is levied on income sources based upon what you earn from employment, business ownership and wealth. The tax rates various per income amount and income source. See for more information Income tax grouped in three boxes.
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Sales tax or value-added tax (VAT) is a tax system that follows the EU regulations. Value-added tax is calculated of three classes:
- Foods and essentials (9% VAT)
- Non-foods and luxuries (21% VAT)
- Special goods (0% VAT)
The applicable VAT rates are displayed alongside the classes listed above. The special goods class is comprised of:
- Goods that are exported
- Goods that haven't been introduced yet
- Catch of Fish
- Excised goods
- International transport of people
VAT collection in the Netherlands is typically done by the entity that offers a particular good or service. Periodically, usually quarterly, the VAT is reported and paid to the Dutch tax office (Belastingdienst) by the collecting entity. The VAT paid for by businesses can be retrieved 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 it sells.
Businesses based in the Netherlands are subject to corporate tax on their worldwide income. The corporate tax rate (2019) is 19% for taxable amounts of up to € 200,000. For taxable amounts over € 200,000, a tax rate of 25% applies. Typically for Dutch corporate taxation, profits generated by a business entity, which is owned by another company is free of taxation. Losses and profits between companies part of a fiscal unity can be off-set among each other.
We offer tax support for small businesses, view our services and rates here.
Various other forms of taxation
Other forms of taxation are property tax, inheritance tax, gift tax, transfer tax, gambling tax, motor vehicle tax and import tax (duties). Property tax is collected by the local authorities (municipality). Inheritance tax (successierecht) is charged for an inheritance received from Dutch residents. Dutch nationals are considered Dutch residents for further 10 years. The inheritance tax rate ranges from 10% to 40%. The current rate for transfer tax (overdrachtsbelasting), the amount of tax one pays over the purchase of real estate, is 2 percent. The gambling tax (kansspelbelasting) is 30.1 percent of any winnings over € 449, won in a chance game.
The Dutch tax office (Belastindienst/toeslagen) also handles the pay-out of allowances for specific purposes. An allowance is available in the Netherlands for formal childcare cost, rent expenses and health care cost insurance. For more information about allowance, see faq section allowances.
The import of goods into the Netherlands from outside the European Union is subject to import duties. These import duties can include excise duty, consumption tax, and other levies. The Dutch Customs authorities (Belastingdienst/Douane) levy and collect the duty and transfer the sums collected to the EU. All EU member states apply duties to conform to the same Common Customs Tariff (CCT) system.
Living and working in the Netherlands for a time? We can help you with your Dutch taxes, so you don't have to deal with the Belastingdienst yourself. Whether you're employed or have a small business, we'll make your life easier and save you money.