When you start to work in the Netherlands, you will also start contributing to the Dutch tax system. But which taxes do you have to pay and which tax facilities apply to your situation? The following chapters give you an impression of the national taxes you may possibly have to pay.
Since this is just an overview, you will probably still have questions about taxes in the Netherlands after reading this chapter. The Dutch Tax Authority (De Belastingdienst) does have a more extensive website in English. All information below is adapted from their website. Please note that if you call the Dutch Tax Information Line (0800-0543), the employees will only speak Dutch. We advise you let a local help you in this process.
Ask for help
If you are an entrepreneur or earn a high salary, we strongly advise you to contact an accountant or tax consultant to help you with your bookkeeping and tax returns. The Rotterdam Expat Centre is happy to refer you to one of the many small or midscale accountants and tax consultants in Rotterdam.
About tax boxes
Everyone in the Netherlands with an income pays income tax. In the Netherlands, this income is divided into three ‘boxes’. Each category of income is assigned to a certain box, and different rates apply to each box. Box 1 includes a graduated tax on wages, profits, social security benefits and pensions. Box 2 is a flat tax on income from substantial business interests. Box 3 is a flat tax on any savings and interest you may have in the bank.
Wage taxes paid monthly by your employer
For most people, the wage tax is the most important tax to pay. In order to prevent taxpayers from having to pay their annual taxes in one large sum, taxes on wages are paid in advance by your employer. Your employer takes out the taxes before transferring your salary to you, and then transfers your share of taxes to the tax authority. This will be clearly listed on your monthly salary statement issued by your employer.
Other taxes over the three boxes are paid annually. Every year, the tax authority invites you to submit your tax return, which you have to hand in before the 1st of April or May. Find out more about income taxes on the tax authority website.
Motor vehicle taxes or additional taxes
If you own a car, you need to pay motor vehicle taxes. If you don’t own a car yourself, but you drive a car for work (via a lease contract from your employer), you pay additional taxes for this car as a registered driver. This tax is calculated based on the purchase value of your car (bijtelling). The motor vehicle tax depends on the weight of your car. The additional tax for a lease car depends on the weight and sustainability of your car.
Besides these individual income taxes and motor vehicle taxes, the tax authority collects its tax income via direct taxes, for example via corporate income taxes, inheritance taxes, and tax on dividends. Indirect taxes are for example collected via VAT (21%), excise duties, motor vehicle and import duties.
Don’t forget about the local taxes
The information above only refers to national taxes. The municipality of Rotterdam collects taxes as well, such as sewage charges, household waste disposal fees, and in some cases (if applicable) property tax (onroerend zaak belasting or OZB), dog licenses. Read about this in the chapter on local taxes.