Dutch Tax Laws and Regulations
Dutch Tax Laws
Dealing with tax, payroll, and employment regulations for your staff from overseas is a tricky process. The Netherlands is no exception, with fines, sanctions and other penalties applying for not complying with the complex and many-layered aspects of taxation.
Global expansion is a great way to grow your business and the Netherlands offers many appealing opportunities. However, the tax laws can be complex and require time-consuming research. By using our PEO service we will take care of the complicated legwork so that you can focus on your business goals in the Netherlands.
Overview of Taxes in The Netherlands
- Individual Income Tax: Up to €68,507 (US$80,330) – 37.10%; Above that – 49.50%
- Social Security Taxes: National Social Insurance – 27.65%
- Value Added Tax (VAT): Standard rate – 21.00%; reduced rate (food, medicines for example) – 9.00%
- Corporate Taxes: Standard rate – 25.00%; SMEs first €200,000 (US$234,500) of taxable income – 16.05%; Some categories of intellectual property – 9.00%
- Withholding Tax (WHT): 15.00%
Poland Individual Tax – Single, Married
Dutch residents are taxed on total income from all worldwide sources. Both residents and non-residents must pay personal tax on income sourced in the Netherlands and usually fit into Box 1, which includes all income from salaries, bonuses, self-employment, and directors’ fees. A National Social Insurance contribution of 27.65% is also deducted at some income levels.
Box 1: Income from employment and National Social Insurance – Resident and non-resident individuals’ taxable income
- Up to €35,129 (US$40,816) + 27.65% Social Insurance: 37.10%
- €35,129 to €68,507 (US$79,560) + no social insurance: 37.10%
- Over €68,507 + no social insurance: 49.50%
Married couples are considered ‘fiscal partners’ and can file joint tax returns.
Other Taxes that might affect an individual’s income include:
- National Insurance Tax (deducted from income)
- Employee Insurance Tax (paid by employers with rates depending on the industry and sector)
- Inheritance, Estate and Gift taxes vary between 10% and 40%
- Property Tax (assessed annually)
- Transfer Tax applying to transferring property ownership
- Insurance Tax of 21% paid by Dutch residents on premiums