To make sure you are handling your Dutch taxes correctly, you can request a free tax review from many reputable tax preparers. According to the latest World Happiness Report, the Netherlands is the fifth happiest country in the world. Foreign-sourced income (salaries, dividends, royalties, capital gains, etc.) The fiscal benefit is calculated based on your gross annual salary. This is an employer exemption. Subject to certain conditions, non-resident taxpayers living in the European Union (EU), Switzerland or one of the member states of the European Economic Area (EEA), which are Iceland, Liechtenstein and Norway, can be taxed as a resident taxpayer of the Netherlands. You should receive your M form automatically if you inform the tax authorities of your move. You can find more videos, talks, and other content related to Global Citizen on our YouTube channel. The Box 3 calculation method changed in 2022 when you fill out your tax return, you will be able to work out whether the old or new calculation is more favorable for your situation. The basic income tax rate was reduced from 37.07% in 2022. However, non-resident entities only have a limited tax liability concerning income from Dutch sources. However, a non-resident can be entitled to certain tax deductions if they qualify as a qualifying non-resident taxpayer. Some categories of direct taxation levied by the national government are: Besides the direct taxation for individuals, the Dutch government also charges some indirect taxes including the following: The Belastingdienst is the main government organization in the Netherlands that collects taxes. Children, foster children, and step-children: A tax-free allowance of 22,918 is available. For homeowners, mortgage interest (on your primary residence) and mortgage-related expenses are tax-deductible. To fulfill the above allowances, you have to work in your business for at least 1,225 hours a year and must spend more than 50% of your working time working for your own company. Our flagship service for entrepreneurs and investors, Use our decades of experience to invest in foreign real estate, Claim a second passport based on familial connections, Click here to see all our products and services, Discover the worlds best passports to have in an ever-changing world, Explore the citizenship options using our interactive citizenship map, Explore the tax rates and details for countries using our interactive tax map, Click here to see all of our research and interactive tools. Besides this taxable income from the primary residency, tax deductions related to the primary residency are available. Earnings subject to income tax in the Netherlands, Taxes on income and salary in the Netherlands, How to file your tax return in the Netherlands, Personal tax allowance and deductions in the Netherlands, Self-employed income tax allowances in the Netherlands, Income tax in the Netherlands for foreigners, Read more in our Guide to the Dutch tax system, Get more info on freelancers tax in the Netherlands, Learn more in our tax guide for freelancers, Get the lowdown in our Guide to the 30% ruling, 3,070 6.095% x (taxable income from work and home 22,660), alimony and other maintenance obligations, temporary stay at home for the severely disabled, the property you live in (if it is yours), investments in environmental and cultural projects, benefit, pension, annuities, and maintenance payments, income earned as a self-employed, freelancer, artist, or professional athlete. This includes employment income, running a business, periodic benefits, income from real estate in the Netherlands, or part of a shareholding in a Dutch company. The water system levy is usually a fixed rate, while the purification levy depends on how many people live in your household. If you live in the Netherlands or receive income from the Netherlands, you must pay income tax. For 2023, earnings up to 73,031 are taxed at 36.93%, while earnings over that limit will be taxed at 49.5%. Non-residents are taxable on capital gains and regular income from a substantial interest in a company resident in the Netherlands. In addition, the city charges hotels and other forms of tourist accommodation tax. Moreover, NHR holders dont pay any gift, inheritance, or wealth tax in Portugal. However, interest is included in taxable income if the recipient holds a substantial interest in the payer. Income tax is paid by your employer per pay check based on your earnings. Some services are exempt from VAT, such as journalists and translators. However, dinners, gifts, and study trips costs are only partially deductible. It also has overseas territories in the Caribbean. It harmonised this system with the rest of the European Union (EU) in 1979. Capital gains generally are exempt from tax. This content is provided for guidance purposes only; it is not meant for direct implementation of transactions or reliance upon when considering entering into transactions. The views expressed are subject to change. Each tax box also comes with its own tax rate. The amount calculated is then reduced by one or more tax credits. Simply being formally registered in the Municipal Personal Records Database or a similar foreign database is not sufficient. Box 3 covers income from assets such as savings and investments. Fret not. Dutch Property Tax When you own Dutch property you are subject to Dutch property tax. Expat employees who satisfy certain conditions can apply for the 30% ruling tax exemption. To cover its obligations under the act, an employer may obtain private insurance or establish a reserve. However, the payment may not exceed tax and National Insurance contributions payable by the other partner. The total amount of tax payable is calculated by applying the various Dutch tax rates to the different taxable incomes in the boxes. There, your form will be stamped and you will need to request your VAT back through the tax refund partner; which is affiliated with the shops where you made your purchases. When do I have to file a tax return in the Netherlands? UK pension commutation in the online tax return. Foreign income and Dutch tax - employment outside the Netherlands In general, the acquisition of a primary residence cannot be fully financed by a mortgage if a capital gain on the previous primary residence was realized within three years before the purchase of the new residence. Others: In most other cases, a tax-free allowance of 2,418 is available. It is your responsibility to ensure you make all relevant disclosures to the relevant tax authorities and that you are compliant with local tax legislation. You can also contact the Client Service of the Dutch Tax and Customs Administration by phonenumber +31.55.538.53.85 (Open: Monday - Thursday 08:00-20:00 - Friday 08:00-17:00) Address: Dutch Tax and Customs Administration/Limburg/ Foreign Office Kloosterweg 22 Postbus 2865 6401 DJ Heerlen The Netherlands . If you rent out a property in the Netherlands that you own, you pay tax on the value of the property or the WOZ-value minus the mortgage amount. For example, the Netherlands offers a "foreigners' tax credit" called " the 30% rule " to certain taxpayers who are not Dutch residents. Not to mention Dutch taxes are some of the highest in the world. Let us know your goal and we will tell you how we can help you based on your details. you may be subject to special tax rules. This is especially true should you be subject to any additional tax mechanisms, such as the 30% ruling or freelancer taxes. The following are the Georgian tax rates: Monaco is not a full member of the EU, but it is a de facto participant in the borderless Schengen Area, offering excellent travel freedom. have to pay import duties and A non-resident receiving income as a director of a company resident in the Netherlands is subject to Dutch income tax. If you work for a company as an employee, you must pay personal income tax, which your employer will withhold at source each month. Some tax-free employment benefits such as travel allowances, study costs, lunches, and Christmas hampers can be provided by the employers. Residents in the Netherlands may be subject to Dutch inheritance tax (erfbelasting). What will be the acquisition vehicle? If you live abroad but receive income that is taxable in the Netherlands, you are generally a non-resident taxpayer. We handle your data according to our Privacy Policy. Furthermore, different rules apply to self-employment taxes in the Netherlands. If there is a recurrent failure to either file correct and complete returns or file returns in time, or make the payments in time, the Dutch tax authorities may impose higher administrative fines, such as: Effective tax planning is not only important during tax season in the Netherlands, but also during immigration, emigration, the start of employment, and property sale or purchase. So far, weve discussed the Dutch tax system, how it categorizes individuals for tax purposes, and taxable income related to each tax box. This registration is mandatory to live and work in the Netherlands. Tax revenues largely finance government expenses. Employers withhold tax and National Insurance premiums (combined) on wages from employees under the Pay-As-You-Earn (PAYE) system. In addition, the employer must pay an income-related contribution for the health insurance of the employee with a maximum of EUR3,886 per employee. Penalty taxes for employers can apply for excessive severance payments (rate of 75%) and certain early retirement payments (rate of 52%). The period for submitting your annual income tax return is generally from March 1 to 1 May of the following year. Furthermore, much of the Belastingdienst website is only available in Dutch, which makes many expats search for a tax accountant or adviser. The Netherlands boasts a highly developed and one of the largest economies in the world. One of the restrictions is that the mortgage should include at least an annuity scheme for paying off the mortgage; that is, there is a prohibition on interest-only mortgages. Reach out to us, and well present you with a holistic offshore strategy addressing all your concerns, needs, and wants. However, you may claim expenses related to your work. If you are outside of Jersey, we may not be authorised to offer or provide you with the products and services available through this website in the country or region you are located or resident in. This facility exempts 30% of certain employment income from taxation. How to claim back VAT Who pays tax in the Netherlands? The value at the beginning of the calendar year of a taxpayers savings and investments is deemed to generate a fixed income. Once youve done that, the world is your oyster. Heres where to request the 2022 M form on the Belastingdienst website. of NHR holders is tax-exempt. Read our 10-step guide to moving abroad to make sure you've got everything covered. Find out how to navigate it, including who needs to pay, rents, and where to get advice. As mentioned earlier, the Dutch Tax Administration classifies income and tax deductions into three boxes. Work for a Dutch tax-payer employer registered with the Dutch Tax Office. Not only is it a beautiful country with breathtaking architecture and an overall laid-back vibe, but it also offers excellent incentives to foreign investors and entrepreneurs looking to establish tax residency there. For the excess salary you receive the tax rate is 52%. You are considered to have a substantial interest if you and your tax partner have at least 5% interest in a companys shares, profit-sharing certificates, etc. This also counts if you have a legally-registered partnership and are registered as living at the same address, if you and your partner live at the same address and own the house together, have a child together, or have a joint pension scheme. You may still need to file a tax return each year if you have any income that hasnt been taxed, such as income from savings, shares or properties. The Dutch wage tax rate is applied at 33,5% for the first 17.878 euros you earn. These treaties also affect the tax liability of Dutch residents and non-residents. Van Dijkhuizen Committee: lower tax rates with a very long first bracket, fewer tax deductibles and simpler benefits will lead to more jobs 19-06-2013 | 16:56 Opening an offshore account, can be an effective way to save, invest and manage money while abroad. See also box 1 (in Dutch) . Author: Amsterdam, Rotterdam, The Hague, and Utrecht are the largest and most important cities. Thats not entirely true, though. You must assess all three tax boxes according to your income and then calculate your tax liabilities accordingly. Box 3 income consists of income from savings and investments, including shares and bank accounts (excluding the value of loans with respect to a primary residence) and income from savings accounts maintained outside the Netherlands. To be a qualifying non-resident taxpayer, you must: If you meet all the conditions except the 90% one, you are still a qualifying non-resident taxpayer if you: The Dutch Tax Administration has a tax program known as the 30% Tax Facility under which certain expat employees may opt to be treated as partial non-residents for five years. However, exceptions apply at the various applicable 2020 tax rates. Tourist tax for holiday rentals, bed and breakfasts, and short-stay accommodation is 10% of the turnover excluding VAT and tourist tax. The country also does pretty well in the tourism department. From 2024, a new basic rate of 24.5% for the first 67,000 and 31% thereafter is expected to be introduced. 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