Dutch tax system

Working in Europe | Taxation/salaries | Netherlands

Taxation

Like much of Europe, taxes in the Netherlands are relatively high. In return the public services are relatively good. Part of your taxes consist of social security contributions.

If you live in the Netherlands, you qualify as a resident taxpayer. If you live abroad and receive income from the Netherlands that is taxable in the Netherlands, you qualify as a non-resident taxpayer. In both cases, you will be subject to Dutch income tax.

How do I pay tax?

If you receive a salary, your employer will pay your tax over this salary in advance. On your payslip you read how much of your gross salary is paid to the tax office monthly. Furthermore at the end of the year you receive an annual overview of your salary and the paid taxes. This overview is called Jaaropgaaf and which is important to keep for your administration.

Then you can actively approach the tax office to file your taxes that year. It is wise to do this if you can use tax deductions/cuts. For example, when you start work halfway the calendar year, it is likely that you can apply for tax deductions.

When you file your taxes you need to provide information on all your taxable income. Keep in mind that most scholarships (including grants, stipendia and fellowships) are also taxable income. Follow this link for more information on income tax.

How much tax do I need to pay?

The total of your taxable income, the applicable tax rates, the tax credits and possible tax cuts will decide the amount of tax you need to pay. If you receive salary, these social security contributions are automatically paid to the Tax Office through the monthly tax-payment withheld from your salary by your employer. Follow this link for more information on income tax.

Other taxes

VAT (Added value Tax)

For each product that you purchase you automatically pay VAT. The general rate is 21% VAT. There are certain branches and services and products which fall under the lower VAT-rate of 9%: food, medicine, books, transport, cultural events, etc.

Motor vehicle tax

If you own a car, motorbike or other motor driven vehicle you will need to pay motor vehicle tax every three months. The amount of motor vehicle tax (motorrijtuigenbelasting) which you have to pay depends on the type of vehicle (age, weight, CO² production, etc).

Municipal rates and taxes

Your municipality can charge taxes for specific services such as water drainage (rioolheffing) and waste handling (afvalverwerking). You may ask your local municipality for information on rates and taxes.