Dutch Tax Laws and Regulations

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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