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Various types of taxes

The Dutch government feels that taxes may not form an impediment for a person or company to reside or establish business in the Netherlands. The Dutch tax system therefore provides a number of incentives for internationally operating companies and foreign employees. Additionally, the Netherlands concluded tax treaties with many other countries in order to prevent double taxation.

The main taxes in the Netherlands include:

  • Corporate income tax
  • Wage tax, income tax and social insurance premiums
  • Value Added Tax (VAT - BTW)
  • Dividend withholding tax
  • Inheritance and gift tax

The Netherlands does not apply any source tax on interest and royalty payments.

In addition to the national taxes, the Netherlands applies a number of local taxes, including property tax and a levy for public cleaning. The rates of such local taxes are imposed by the municipality of residence or registered offices

If you decide to reside or carry out activities in the Netherlands, you are expected to register as a tax payer in the Netherlands. The Tax Department (belastingdienst) assigns you a tax number. In principle, residents of the Netherlands are taxed on their worldwide income. Non-residents are subject to taxation if they derive a certain income from the Netherlands.

FAQ

How strict is the Dutch Tax Department?

Different country, different rules. Please do not simply assume that officers respond in the same way as in your country. The Netherlands has a ‘free spirit’, but strict compliance is expected with the rules that are imposed. This also applies to the tax rules. You must comply with submission and payment dates and the Tax Department will grant postponement only for certain taxes regarding filing the tax bill and payment of tax. Being late is being fined, and that is a waste of money after all.

However, negotiating on taxation in certain situations with the Tax Department in the Netherlands is quite regular. This allows you to obtain certainty in advance regarding the amount or percentage of taxes to be paid.

When should I pay the tax bill?

The payment period of your tax bill depends on the type of tax. The Netherlands levies taxes based on tax bills and assessments. A tax bill is applied, for example, relating to wage withholding tax and VAT, and must generally be paid on the last day of the month following the closing date of the taxation period. You should not suspend payment until receiving an assessment - that means you are late.

The latest date of payment of an assessment-based tax (for example, income tax or corporate income tax) is always stated on the relevant assessment. You will not be able to pay the tax before receiving the assessment.

How to register for the Tax Department?

It depends whether you will pay tax as an individual person or as a company.

An individual should report to the Tax Department in person. You can make an appointment in advance for this purpose. After identification by the Tax Department, you are issued the tax number (BSN - Burger Service Number) immediately. The Tax Department will send you an income tax form that serves as a tax bill in due course. Alternatively, you may request your tax bill form at your own initiative.
Regarding local taxes, you should register with the Tax Department in the city where you live.

A business will have to register in the Chamber of Commerce’s Trade Register. The Chamber of Commerce passes on the details to the Tax Department, which will register the business for the applicable taxes based on the details received. The Tax Department sends the tax numbers to the registered offices. It is important to have this checked by your tax advisor, as the Tax Department sometimes tends to register you for more taxes than is applicable. The Tax Department automatically sends you the first tax bills and a login code and password to file your tax bill online. Many taxes can be filed electronically.