Tax Netherlands

On this page, you will find everything you need to know about the Dutch tax system.

Income tax Netherlands

If you are employed in the Netherlands or receive unemployment benefits, taxes are withheld from your payments by your employer or benefits agency. Every year you need to fill in a tax declaration to reclaim any overpaid tax. You can file your annual tax return yourself or you can have a Dutch tax advisor do it for you.

Filing your income tax can be complicated and doing your taxes in a foreign country is even more of a challenge. Don’t despair! If you are having difficulties, we are here to help. Blue Umbrella is happy to file your Dutch income tax return, whether you have just migrated to the Netherlands, are resident for a full tax year, or have already left. All for the same low fixed fee and with no surprises.

Payroll tax

Everyone working in the Netherlands is required to surrender a portion of their salary to the government in the form of payroll tax.

Payroll tax is the collective term for the taxes and premiums deducted from the gross salary. After deducting these and other levies, the net salary remains . This amount is ultimately paid out to the employee.

Payroll tax consists of two components, namely:

Wage tax
A general source of income for the government to pay for things like education, healthcare costs, and new roads.
Premium for national insurances
Reserved for social provisions for everyone in the Netherlands, such as old age pension (AOW) and child benefit.

General tax credit

The general tax credit is a deduction from your income tax and national insurance premium. This means you pay less tax and premiums. Everyone is entitled to the general tax credit. However, whether you can fully benefit from this tax credit depends on your age and whether you have lived in the Netherlands for the entire year.
If you are employed, you receive this credit through your employer. If you are receiving benefits, you receive the general tax credit through the benefits agency.
The general tax credit depends on the level of your income. You receive less general tax credit as your income increases. The general tax credit is at most the amount you have to pay for income tax and national insurance premiums.

Labour tax credit

The labour tax credit is the tax credit you receive when you work. The labour tax credit is calculated based on your earned income. If you have an employer, they already take into account the labour tax credit when calculating payroll taxes. If you file a tax return, you do not need to separately request the labour tax credit. It will be calculated automatically.

VAT sales tax

Are you an entrepreneur and do you independently operate a business or a profession? Then you usually pay VAT (value-added tax) on your revenue. The legal form (for example, BV) is not relevant for paying VAT. Even a foundation or association pays VAT if the Dutch Tax Office considers it as a business. You do not pay VAT if you only perform exempt activities or use the small businesses scheme (KOR).

Sales tax declaration

You must file the VAT return digitally. Have you declared too much or too little VAT this year or in the past 5 years? Then you must correct your VAT return. Under certain conditions, it is possible to offset a VAT refund with a payroll tax return.

Import tax

Do you import goods or raw materials from a country outside the European Union (EU)? Often you must pay import duties on these. And you will encounter other taxes and costs, such as clearance fees. Also, read about when you don't have to pay any or lesser import duties.

Calculating import duties

The amount of import duties you pay depends on the product's goods code. This code is called the Taric code when importing . Most Taric codes consist of 10 digits. The Taric codes are based on the 6-digit Harmonized System codes. Customs worldwide use these HS codes to classify products.

Find the Taric code of your product and the corresponding rate in the Dutch Customs Tariff (DTV). Then calculate the import duties for most products based on the customs value. The customs value is the purchase price of the product plus the transportation and insurance costs to the EU border or port of entry. For some products, import duties do not depend on the customs value. You pay import duties based on weight or size.

Motor vehicle or road tax

D o you have a motor vehicle registered in your name? Then you do not have to file a separate vehicle tax return. The registration is also your tax return. The Tax Office automatically receives the necessary data from the RDW.

The Dutch Tax Office will send you an invoice shortly afterward. The invoice will state the amount you have to pay in road tax. It does not matter whether you use the motor vehicle on the road or park it on private property.

Please note: You remain responsible for paying motor vehicle taxes on time. Have you had a motor vehicle registered in your name and you do not receive a bill from the Dutch Tax Office in 1 month? In that case, please contact the tax authorities yourself.

Travel expense reimbursement or 'kilometervergoeding'

If you travel to work using your own transportation, your employer can reimburse you up to €0.23 per kilometer since January 1, 2024, without you having to pay taxes on it. This maximum kilometer reimbursement applies regardless of the mode of transportation you use.
If your employer reimburses a higher travel expense than €0.23 per kilometer , the amount exceeding €0.23 per kilometer is considered as income. Your employer must withhold income tax on this amount.

Inheritance tax

Are you expecting an inheritance? In most cases, you will then have to file a tax return with the Dutch Tax Office and pay inheritance tax. However, there are exceptions to this rule.
Essentially, there are three situations in which you do not have to pay inheritance tax in the Netherlands:

The value of the inheritance is less than or equal to the exemption (see table below) applicable to you
The deceased did not have Dutch nationality
The deceased did have Dutch nationality but had been living outside the Netherlands for more than 10 years

Gift tax

Gift tax is a tax levied on the value of everything obtained by gift from someone who was a resident in the Netherlands at the time of the gift. Gift tax is regulated in the Inheritance Tax Act. This law also regulates inheritance tax.

The taxable base for gift tax consists of what is obtained by the recipient, after deduction of burdens and obligations benefiting the donor or a third party. For example, if a parent gifts their house to one of their children but at the same time retains the right to live in that house, the full value of the house is not gifted, but rather the value of the house burdened with the right of use and habitation, a lower value (the right of use and habitation has a value-reducing effect).

Corporate tax

Are you the owner of, for example, a private limited company ( bv ) or a public limited company ( nv )? Then you must file a corporate income tax return for your business. Sometimes, foundations and associations also have to file a corporate income tax return.

Corporate income tax is a tax on profits. The Tax Authority distinguishes between legal entities and natural persons for taxing profits. Legal entities (such as companies and organizations) must file a corporate income tax return. Natural persons (such as sole proprietorships) pay tax on profits through personal income tax.

Transfer tax

If you buy a piece of land or a building in the Netherlands, you pay transfer tax. You also pay transfer tax on rights to immovable property, such as leasehold rights, and on shares you buy or receive from a private limited company ( bv ) or public limited company ( nv ) whose assets consist mostly of immovable property.

A notary files the transfer tax return on your behalf. You can also file the transfer tax return yourself.

Transfer tax rates

2% for the property in which the buyer will reside themselves for an extended period, and for which the starter exemption does not apply.
10.4% for all other immovable property, such as undeveloped land parcels, vacation homes, commercial properties, and for example, a garage purchased separately from the house.

Gambling tax

Gambling tax ( kansspelbelasting ) is a tax that participants of gambling games must pay on their winnings. Organizers of gambling games must also pay gambling tax on the profit they make from the gambling game.

Dutch tax penalties

The Dutch Tax Office can impose a fine in the following situations:

You do not request (or do not request on time) for the submission of a tax return
You do not submit (or do not submit on time) your tax return.
You fill out your tax return incorrectly or incompletely.
You do not pay your tax assessment on time. (Examples of tax assessments include: income tax, corporate tax, inheritance and gift tax.)

Annual income tax return

The Dutch tax office is known as the Belastingdienst and letters come in a recognizable blue envelope. The service will normally let you know by post if you need to fill in a tax return in the Netherlands, for example, if you are self employed . Even if it does not, it might be to your advantage to investigate if you can file a tax return to access certain tax benefits.
Register free and complete our plain English, easy-to-use, online tax form in less than half an hour. We will check your tax data, optimize it and apply the appropriate tax code. We'll send you the tax return results, accurately and in good time , in a report including a detailed break-down and all in English, so you can verify the results. If you approve, we'll file your income tax return with the Dutch tax office ( Belastingdienst ). If you have overpaid, you can expect to receive a refund but if you have tax to pay, the Dutch tax office will send you a bill.

If you want to estimate how much income tax you owe in the Netherlands, fill in our tax calculator.
If you are entitled to a tax credit or a tax refund due to being resident for a partial tax year, deductible items such as the mortgage rebate, study expenses (up to 2020), medical expenses, or special childcare expenses, file an income tax return with us to receive your refund.

Provisional income tax filing

If you are entitled to a refund for the current year and you would like to receive your refund early, file for a provisional tax refund with us. The provisional tax filing facility can also be used for early tax payment. For more information, visit our provisional tax filing page.

The box system on tax return

The tables below shows how much tax you owe in the Netherlands for different types of income. The Dutch tax office divides income into three sources, known as boxes; box 1, 2 and 3 . Each box has its own set of tax rates, defining how much tax you pay for this income source.

Box 1 shows the amount of tax you owe on income from employment (including a home that you live in and own).
Box 2 shows the amount of tax you owe on income from business ownership.
Box 3 shows how much tax you owe on your assets (such as cash, bank deposits, real estate and investments).
For each box a different set of taxation rules applies, and the taxable amounts are expressed as percentages (tax rates) .

Tax rates are set annually by the Dutch government. The rates for box 1, box 2 and box 3 can be found below . As of 1 January 2020, the Dutch tax office has two (instead of four) tax brackets for box 1.

Tax brackets Netherlands

Tax brackets in the Netherlands vary depending on the type of income, box 1, 2 or 3. For box 1 tax (on income from employment, including home ownership), there is a 37.07% tax rate for income from € 0 - € 69,397. Above this, the tax rate is 49.5%. For box 2, there are no brackets: any direct or indirect interest of 5% or more in a company is taxed at 26.9% in 2021. Box 3, the tax on assets, is based on a fictitious yield of up to 5.69% of the total asset value, taxed at 31%. If your total box 3 income is less than €50,650 (or €101,300 combined with your fiscal partner), there's no tax to pay.

Tax forms in the Netherlands

There used to be far more tax forms in the Netherlands, but nowadays there are three that you are most likely to come across as a private individual. These are the tax forms you need to know about.

P-form (in Dutch P-fromulier)

The P-form , for private individuals rather than businesses, is the most common type of income tax return. This is the standard declaration of your income tax if you are a normal resident here, with no relevant changes to your status in the year. It’s not particularly complicated and can be filled out via the Dutch tax office Belastingdienst website, if you have the necessary DigiD .

Even if you do not have an invitation from the Dutch tax office to fill in a tax return, you can file this one online. It might be in your interest to claim benefits such as a rebate on interest paid on your mortgage, tax advice costs or certain bills connected with buying a house.

M-form (in Dutch M-aangifte)

The M-form is used when your migration status changed during the Dutch tax year, which runs from 1 January to 31 December. This means that you spent part of the tax year as a Dutch resident. If you had a job, you were probably taxed as though you were here for the full year, so it may be in your interests to fill in this form because then you will probably get a refund on what you have overpaid.

Beware! The tax office does not automatically know that you may need an M-form and you cannot fill this in yourself via the tax office website. The only way to do this yourself is using a 59-page booklet, all in Dutch and with all of the guidance in Dutch. Blue Umbrella can file this for you using our own software.

C-form (in Dutch C-formulier)

This tax declaration form is less commonly used and is for people who have a foreign tax obligation (in Dutch, who are buitenlands belastingplichtig ). This might apply to you if you are studying in the Netherlands but officially reside somewhere else, if you have a job here for only some of the time but pay your social security contributions and taxes elsewhere, or if you only have property here.

The C-form is one of the online tax forms that you can do yourself but it is more tricky . You might want to add more information that will be in your favour. Blue Umbrella can help!

Mortgage tax rebate

If your are an owner-occupant of a property in the Netherlands, you can get part of the financing costs refunded. The rules for the refund are gradually changing over the year. Which tax rules apply depends on the tax year and the year when your closed a mortgage for the first time.

Applying refundable expenses

The refundable expenses qualify as a negative income component in box 1 ( income from work and home ownership ) . The amount in income your received from employment is reduced with the total in expenses you incurred as a home owner . The expenses reduces your taxable income and thus the amount of income tax due. Different from box 3 ( savings and investment ) , you are not taxed for capital gains made in box 1 .

For more information on Mortage and your tax return go to: Mortgage tax rebate.

Tax deductions explained

Certain expenses related to a personal situation may be tax-deductible. These extra expenses are treated as part of a personal allowance. They include:

Paid alimony
Specific healthcare costs
Costs for a temporary stay at home for severely disabled children who normally live in a residential care centre.
Expenses for educational services (up to 2020)
Gifts
Maintenance costs for registered monumental buildings (up to 2018)
Loan to a start-up company (venture capital)

Alimony paid to an ex-partner

Paid alimony can be deducted from box 1 income. Other costs for dependants may be included. You do not need a court settlement for alimony payments to claim this personal allowance. An ex-partner is a former wife or husband (after a divorce), someone with whom you lived, or a wife or husband from whom you are separated.
Note: as of 1 January 2022, a maximum of 40% of alimony paid can be deducted for an income of € 69,398 and upwards. For 2021, a maximum of 43% of alimony paid can be deducted for an income of € 68,507 and up.

Tax deductible expenses

The following expenses are tax-deductible:

A periodic payment for partner alimony and any supplementary payments
A lump-sum payment for partner alimony
A lump-sum payment for an annuity settlement with an insurer
Partner pension paid in the form of an alimony
Payments to settle pension entitlements, annuity and other income insurances for which premiums have been previously deducted
Settlement of social security payment claims by an ex-partner
Mortgage interest tax relief ( hypotheekrente-aftrek ) for a home where you used to live with your partner but have now left, while the partner continues to live there (for up to two years after the move)

The following expenses are not tax-deductible:

Expenses for attorneys, lawyers and court cases to determine , alter or end alimony payments
Pension entitlements paid directly to an ex-partner

Specific healthcare costs

Specific health care costs may be tax-deductible. The following conditions are necessary:

The specific health care costs don't fall under the health insurance excess (i.e. they are not part of an insurance policy)
Expenses directly related to the medical condition are tax-deductible
The deduction should be for the tax year in which the expenses were made
Expenses for which no coverage can be obtained from a health care cost insurance and for which no allowance is available, qualify as a deductible

The qualifying expenses made for the following people are tax-deductible as well:

You and your fiscal partner
Children younger than 27 years if they cannot afford the expenses
Severely disabled persons of 27 years and over, who are part of your family household
Parents, brothers, and sisters who are part of your family household

Expenses for educational purposes

Expenses for education purposes can be tax deductible if they meet the following criteria (up to 2020):

You are not entitled to a scholarship
The education is to improve your position on the work market

Expenses directly related to education are tax-deductible, such as tuition fees, course fees, and examination fees and study or course material such as specific books and software. The educational expenses for a fiscal partner can be included as a tax-deductible.

The following expenses are not tax-deductible:

Costs for a (laptop) computer, printer or other peripheral items
Travel expenses
Interest payments for education
Expenses to furnish or equip a study room

Educational expenses for children cannot be included in your tax deduction. The educational expenses should be deducted in the tax year in which the expenses were incurred.

30% ruling

The 30 percent ruling is a tax exemption available for international employees who move to the Netherlands, or expats currently working in the Netherlands, with knowledge or skills that are in short supply. The Dutch tax office needs to grant you permission for this tax exemption. You and your employer must submit an application and meet various conditions.

To make use of the 30% ruling, you must meet the following conditions:

You were recruited from more than 150km from the Dutch border and lived there for 16 of the 24 months before your first working day. This restriction targets mainly employees recruited from Belgium, Luxembourg and parts of France, Germany and the UK (but not London). The distance of up to 150 km from the Dutch border is measured point to point, in a straight line. There is an exception to the 24 month rule if a qualified 30% ruling holder returns to the Netherlands.
For practical reasons, the Dutch tax office presumes employees have scarce skills or knowledge if their gross salary is at least the income norm (€46,107in 2024). There is an exception for qualified scientists and medical doctors, while employees with an MSc who are under 30 have a reduced income norm.
The date on your employment contract should be set before you arrive, and the maximum validity for the 30 percent ruling is 5 years. This may be reduced if you lived in the Netherlands in the past 25 years. If you received your 30 percent ruling before 1 January 2019 (when rulings were up to eight or ten years), a transition period may apply.
Foreign PhD students can also be eligible within a year of receiving their qualification if they lived in the Netherlands or within 150km from the Dutch border while doing this research, but lived outside this area for 16 of the 24 months before starting the PhD.

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

PhD research was conducted in the Netherlands and the PhD student was also employed, or if employment started prior to the doctoral research and obtaining the PhD qualification was a condition for the job.
The 30% ruling would start after the PhD was completed.

Tax partners in the Netherlands

If you are living together and married with someone or are registered partners, you might meet the requirements for (mandatory) tax partnership in the Netherlands.

Having a tax partner may affect your Dutch income tax position in terms of the amount of tax you owe or the size of your tax refund. You may be able to choose whether or not you are fiscal partners, which might be to your tax advantage. Tax partnership affects other taxes such as gift or inheritance tax and means you file a joint income tax return.

Always tax partners

You are always tax partners if you both live at the same address (in the Netherlands) and are married or have a registered partnership together. This is not optional anymore. If you don’t meet these requirements, then there are more things needed to elect someone as your tax partner.

If there are more people registered at the same address but you are not married or registered partners, it may be possible to elect a tax partner and several of them could be eligible.

Conditions for partnership witha housemate

If you live at the same address you may meet the requirements if you:

were tax partners in the previous year;
have a notarial (civil) partnership to live together;
have a child together, or have acknowledged one of the other person's children;
are registered as pension fund partners;
own a house (primary dwelling) together;
have a child under 18 living at the same address.

You can only be tax partners if your housemate is not someone else's tax partner. If you are divorced and you have rented your house (primary dwelling) to your ex-partner, or the other way around, this may affect your partnership status so you should let us know.

Guidance

The information on these pages is designed to guide you through the dilemma of tax partnership but please ask Blue Umbrella for assistance if you have more questions

Dutch tax calculator

Use our Dutch tax calculator to find out how much income tax you pay in the Netherlands. Check the 'I enjoy the 30% ruling' and find the maximum amount of tax you can save with the 30 percent ruling. Sole traders (self employed) receive additional tax credits lowering the total amount of tax paid. Select 'Self Employment' to calculate your net income if you are a sole trader.