Types of taxes in the NetherlandsKelly Sikkema

The Belastingdienst (Dutch tax office) collects taxes through a variety of streams. Various taxes apply to everyone in the Netherlands. One is liable for state taxes on income, wealth and assets as well as local government taxes for the provision of local services. Here are the main tax types that you will encounter as resident in the Netherlands.

Income tax (inkomstenbelasting)

Everyone in the Netherlands is taxed on their income, wealth and assets (inkomstenbelasting).

The amount that you have to pay in terms of income tax depends on the amount of your income and assets. A percentage of your monthly salary is automatically deducted by the Dutch Tax Office (Belastingdienst). At the end of each year, you need to file a tax return (belastingaangifte) where you are required to declare your income and assets. You are sent a final tax notice and in some cases will receive tax back.

You can fill your income tax return declaration online or with the help of a Dutch tax advisor.

Read more on the Dutch tax system and how to file your taxes  in the Netherlands.

Payroll tax (loonheffing)

Payroll tax is tax and other contributions that are deducted from your salary by your employer. In this way employees do not have to pay this contribution later as income tax. The payroll tax levy is composed by the tax on your salary (wage tax or loonbelasting) and national insurance contributions for pensions, unemployment allowance and other Dutch benefits and allowances.

VAT sales tax (BTW / omzetbelasting)

The Belastingdienst also collects taxes via the sales or revenue tax (omzetbelasting). The Dutch name for value-added tax (VAT) is BTW (Belasting Toegevoegde Waarde). All businesses, except some foundations and associations, must add BTW to the price of their goods and services. There are three different levels of BTW:

  • A 9% Dutch BTW rate, commonly known as the low tariff, applies to the sale of common products (e.g., food, drink, agriculture, medicines, books). You can find a detailed ist of goods and services for this tariff in the link Tarieven en vrijstellingen (in Dutch);
  • A 21% Dutch BTW rate, also called the high or general tariff, and the moste common rate, applies to all other BTW taxable activities;
  • Some goods or services are exempt from BTW (0%), such as international activities. This mainly involves the supply of goods from the Netherlands to another EU country and some services related to cross-border transactions.

For more information on sales tax in the Netherlands, visit the website of the Belastingdienst.

Businesses (including freelancers) must calculate the BTW they have earned and spent via the quarterly sales tax declaration (BTW aangifte). They then pay this amount to the Belastingdienst.

[Source: Belastingdienst]

Other forms of taxation in the Netherlands

There are many other forms of direct and indirect taxation in the Netherlands. These include:

Import tax (douane)

A tax paid on goods received or imported from abroad. The amount depends on the value of the goods and if you receive them as an individual or for your business. If an individual, receives goods worth more than 22 euros from abroad then he has to pay minimum 2,5% import duties and BTW. The import tax also applies to Internet purchases.

Motor vehicle tax (motorrijtuigbelasting)

This tax is paid when you buy or import a motor vehicle, or when a vehicle is put under your name. The amount depends on the type of vehicle (car, van, motorcycle, lorry etc.), weight and type of fuel. This falls under the environmental tax category.

Road tax (wegenbelasting).

Everyone who owns a car or other motor vehicle pays road tax. The amount of tax varies according to the size of vehicle. Heavier vehicles are taxed more than lighter ones and diesel-powered vehicles are taxed more than petrol-driven vehicles. Motor vehicle and/or road tax is collected by the Dutch Tax Office.

Inheritance tax (erfbelasting)

A tax on wealth acquired by inheritance of properties and financial affairs in the Netherlands after someone’s death.

Gift tax (schenkbelasting)

A tax paid on the value of anything accepted as a gift from a resident in the Netherlands.

Transfer tax (overdrachtsbelasting)

The transfer tax must be paid by a buyer when purchasing a property or business. The rate of buying a house is currently approximatively 2% of the property value. From January 1, 2021, people aged 18-35 who are buying their first property in the Netherlands will not have to pay the transfer tax. From April 1, 2021, the costs of this first property must not exceed 400.000 euros.

Gambling tax (kansspelbelasting)

A gambling tax of 30,1% must be paid on prizes worth more than 449 euros, won in any game of chance.

Boating tax

Owners of boats and pleasure cruisers docked in the Haarlem area must pay a boating tax (binnenhavengeld) to Waternet. This tax contributes to the maintenance and management of the city’s waterways, bridges and public safety on the water. When this tax is paid, the vessel owner is given a vignette that must be clearly displayed on the back of the boat.

Municipal taxes and levies

Real estate tax (onroerende-zaakbelasting)

Home owners pay a yearly real estate tax based on the value of their property. Real estate includes any building, such as a residence or place of business. Tenants of offices in commercial buildings also need to pay real estate tax. The municipality estimates the value of all properties every year. This valuation is called the WOZ-waarde (WOZ is short for Wet waardering Onroerende Zaken, or the Immovable Property Tax Act). Taxation is based on this valuation.

Waste collection levy (afvalstoffenheffing – AFV)

The waste collection levy is used for the collection, processing and disposal of household rubbish. The amount of the levy depends on the number of occupiers per household. The method of payment for this tax varies by municipality. Owners of residential or business property must also pay a sewage levy (rioolheffing) for their connection to the sewage network.

Water taxes

Every year you are typically taxed for two water taxes (depending on your property). The water board tax (waterschapsbelasting) contributes to regional water system management, such as maintenance of dykes and control of water levels. In addition, there is a pollution levy (verontreinigingsheffing) for properties not connected to the sewage network, and a water purification levy (zuiveringsheffing), contributing to purification processes used for waste water, for all properties connected to the sewage network. The method of payment varies by municipality. Please note: the water taxes do not account for your drinking water usage; this is monitored and charged separately by your local water supplier.

Parking tax

Vehicle users in Haarlem must also pay for parking (parkeerbelasting), by way of the on-street parking fees, or by purchasing a parking permit.

Tourist tax for short-term rentals

If you sublet your home in Amsterdam or Haarlem as a holiday rental or short stay apartment (to tourists or other visitors to the city who are not permanently resident), you are required to collect and pay tourist tax to the City of Amsterdam or of Haarlem. If you live elsewhere, please check the terms and conditions in your municipality.

Dog tax

Pet owners are mostly required to register their pet and pay an annual fee. Here’s more information about the annual dog tax (hondenbelasting).

[Source: INAmsterdam]

Tax advisors in the Netherlands

Here’s a full list of expatsHaarlem’s partners, including tax advisors, and more information on our Partnership Programme.