Dutch Income Tax
The Netherlands taxes its residents on their worldwide income and additionally non-residents are subject to tax only on income derived from specific sources in the Netherlands (mainly income from employment, director’s fees, business income, and income from Dutch immovable property). Dutch income tax varies according to the origin of the income and distinguishes three categories, which are known as “boxes”. The income in each of the three boxes is taxed at a different rate.
Box 1 applies for an income from labour and owner-occupied dwelling (taxed at progressive rates up to 52%) includes income from the following sources such as present and past employment, business activities, periodical payments and pensions from individuals (e.g. alimony) or insurance institutions and owner-occupied dwelling.
Dutch income tax rates for 2016 for box 1
|Taxable income (EUR)||Tax on column 1 (EUR)||Tax on excess (%)|
|Over (column 1)||Not over|
* In the first and second bracket of box 1, national insurance tax is levied at a rate of 28.15%.
Box 2 applies for an income from substantial shareholdings, includes dividends and capital gains derived from substantial shareholdings in resident and non-resident companies with flat rate of 25%.
Box 3 applies for an income from savings and investments, replaces ordinary taxation of all types of income from capital, other than deemed income from an owner-occupied dwelling (Box 1) and dividends and capital gains from substantial shareholdings (Box 2). In fact, taxation of Box 3 is based on a 4% deemed yield on net assets; the deemed yield is taxed at a flat rate of 30%.
Calculate your net income:
Please note, that this calculation took into a consideration just a very basic pieces of information of yours and the result might vary significantly. Contact us for detailed and precise calculation or let us know by filling a form and will call you back. Contact us for an exact calculation.
The Netherlands introduced a special tax incentive called 30% ruling facility in order to attract employees from abroad with specific skills. In general, if an employee comes to the Netherlands to work, they may face additional expenses (“extraterritorial expenses”), the particular 30% ruling allows employers to compensate their ‘extraterritorial’ employees for expenses they incur in connection with the fact that they are working outside their home country. That is basically done by means of a fixed cost allowance of 30% of the wage.
Requierments to claim the 30% ruling
To be able to apply for the 30% ruling the following criteria needs to be met:
- the employee works for an employer that is registered with the Dutch tax office and pays payroll tax;
- employer and employee have to agree in writing that the 30 percent ruling is applicable;
- the employee has to be transferred from abroad or has to be recruited abroad;
- the employee did not reside within 150km from the Dutch border for the last 18 out of 24 months at the time of hiring;
- the employee’s salary is at least EUR 36,889 per annum.
- The employee needs to have expertise that is scarcely available in the Netherlands.
PhD and Master’s graduates
Less strict rules apply for PhD and Master’s graduates who are younger than 30 years:
- the minimum salary requirement is EUR 28,041 taxable.
- if the PhD was completed in the Netherlands, the requirement of ‘being recruited from abroad’ does not have to be met if the candidate is hired within a year of completing his or her studies.