Taxes

Taxes in the Netherlands

The Netherlands has a comprehensive tax system with relatively high rates compared to some countries, but the 30% ruling and various deductions can significantly reduce the burden for qualifying expats.

Income Tax Rates (2026)

Box 2: Income from substantial shareholding (5%+): 26.9%

Box 3: Income from savings/investments: Varies (deemed return taxed ~36%)

The 30% Tax Ruling

The most significant tax benefit for expats allows 30% of salary to be paid tax-free:

2026: 30% tax-free (capped at €78,600 for salaries €262,000+)

2027 onwards: Reduced to 27%

Eligibility:

• Recruited from abroad (lived 150km+ from NL border)
• Specific expertise not readily available in Netherlands
• Meet minimum salary thresholds
• Apply within 4 months of starting work

Impact example (€80,000 salary):

• Without 30% ruling: ~€35,000 tax
• With 30% ruling: ~€24,000 tax
• Annual savings: ~€11,000

Other Deductions

Common deductions:

• Mortgage interest (eigenwoningforfait)
• Commuting costs (limited)
• Study costs (certain programs)
• Donations to charity
• Healthcare costs above threshold
• Alimony payments

Social Security Contributions

Included in income tax rates:

• AOW (state pension): ~17.9%
• ANW (survivor benefits): ~0.1%
• Wlz (long-term care): ~9.65%

Tax Filing

Key dates:

• Tax year: January 1 - December 31
• Filing deadline: May 1 (following year)
• Extension available: Request by May 1

Methods:

1. Online: Via Belastingdienst (tax authority) website with DigiD
2. Paper: Forms available
3. Tax advisor: Recommended for first year/complex situations

Pre-filled returns: The Belastingdienst pre-fills much information. Check, adjust, and submit.

VAT (BTW)

For Self-Employed

Quarterly VAT: File and pay BTW quarterly

Income tax: Annual filing, often with quarterly advance payments

Deductions: Business expenses, home office, car (complex rules)

Payroll Tax

Employers withhold income tax from salary. Your payslip shows:

• Gross salary
• Loonheffing (income tax + social security)
• Pension contributions
• Net salary

Double Taxation Treaties

The Netherlands has treaties with 90+ countries to prevent double taxation. Your home country treaty may affect:

• Where you pay tax on certain income
• Pension taxation
• Investment income

Important Tax Considerations for Expats

First year:

• Partial year tax liability
• Consider timing of arrival
• Register for 30% ruling ASAP

Box 3 (wealth tax):

• Tax on deemed return from savings/investments above ~€57,000
• Rate of ~36% on assumed 6.04% return
• Effectively ~2% wealth tax
• 30% ruling holders can choose limited Box 3 exposure

Leaving Netherlands:

• Exit tax may apply on certain holdings
• Pension portability rules
• Final tax return required