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The taxation of individuals in the Netherlands

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Last updated : 12-06-2024
31 December 2023 Add expertise tag Add service tag Add country tag
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A detailed overview of the provisions of the Dutch income tax act for individuals

Individuals who live in the Netherlands (resident taxpayers) and individuals who live outside the Netherlands but receive income from certain Dutch sources (non-resident taxpayers) can become subject to the levy of Dutch personal income tax (in Dutch: 'inkomstenbelasting').

The levy of Dutch income tax for individuals is based on the Dutch Income Tax Act 2001 (in Dutch: 'Wet inkomstenbelasting 2001').

The Dutch Income Tax Act 2001 is written in the Dutch language only and no official English version is available. For your convenience, we have published a glossary of important terms used in the Dutch Income Tax Act 2001. This glossary will help you to identify and understand correspondence and publications in Dutch which are relevant to your Dutch tax position.

In this section of our website, you will find a description of the Dutch income tax regime for individuals, including relevant figures, such as the amount of general and specific tax deductions and allowances, the applicable tax rates, etc.

The Dutch Income Tax Act 2001 provides an extensive amount of very detailed rules. We have summarized the main rules for you that are applicable at the time of this update. Please feel free to consult our content and use it as convenient, but please be aware that the rules applicable to your specific situation can deviate from the main rules described on this website or have changed since the last update. We strongly advise you to consult us before you draw final conclusions regarding your tax position.

You will find the following information with regard to the Dutch income tax regime for individuals: 

       
Taxable individuals   Tax residence of individuals in the Netherlands      
  Spouses, registered partners and children    
  The levy of Dutch social security contributions      
The taxable income for resident taxpayers of the Netherlands Box 1: The income from labor and main residence (Box 1) Taxation of income from employment in the Netherlands The tax deduction for travel expenses/commuting (reisaftrek)
    Taxation of a private house used as main residence  
    Income from a Dutch partnership  
    Income from a private business conducted in the Netherlands The old age reserve, Fiscale OudedagsReserve (FOR), for individuals who conduct a business (abolished from 1 January 2023)
      The hourly criterion for private entrepreneurs in the Dutch Income Tax Act 
      Special tax deductions for the private entrepreneur (Ondernemersaftrek)
      The self employed deduction (zelfstandigenaftrek)  
      The deduction for Research and Development activities (aftrek speur- en ontwikkelingswerk)
      The co-operating partner deduction (meewerkaftrek) 
      The start-up deduction in case of disability (startersaftrek bij arbeidsongeschiktheid)
      The liquidation deduction (stakingsaftrek)
      The small business profit exemption (MKB-winstvrijstelling)
    Income from a main residence (eigenwoning forfait)  
    Other income which requires a certain level of labor (belastbaar resultaat uit overige werkzaamheden)   Lucrative interest (carried interest arrangements) (met een werkzaamheid verband houdende lucratieve belangen) (article 3.92b Dutch Income Tax Act 2001)
  Personal deductions and allowances for income from labor and main residence (Box 1 income) Tax deduction of premiums for annuities (uitgaven voor inkomensvoorzieningen/ lijrenteaftrek)  
    Personal allowance (persoonsgebonden aftrek)   
    Tax deductible expenses for maintenance obligations (Onderhoudsverplichtingen)   
    Tax deductible expenses of specific costs of care  
    Tax deductible weekend expenses for disabled persons  
    Tax deductible expenses for education - replaced  
    Tax deductible expenses for listed monumental buildings - replaced  
    Tax deductible gifts  
  The tax rate for Box 1 income Tax rates for individuals  
  Box 2: income from substantial shareholdings   The regular income from substantial shareholdings  
    The deduction of expenses from regular income out of substantial shareholding  
    The income from the alienation of a substantial shareholding   
    Deferral and roll over facilities for income from substantial shareholding   
    The compensation of losses from substantial shareholding  
    The tax rate for income from substantial shareholding    
  Box 3: the income from savings and investments (inkomen uit sparen en beleggen)

The tax incentive for social investments (maatschappelijke beleggingen)

 

  
    The amount of exempt equity (heffingsvrij vermogen)  
    The tax rate for Box 3 income  
  The amount of income tax due   Tax rates for individuals  
    Tax exemption or tax credit for resident taxpayers of the Netherlands in relation to foreign source income The tax credit under Dutch tax treaties
      The foreign income exemption under Dutch tax treaties
  Personal levy rebates for resident taxpayers of the Netherlands (heffingskortingen) The general levy rebate (algemene heffingskorting)  
    The labor rebate (arbeidskorting)   
    The income dependent combination rebate (inkomensafhankelijke combinatiekorting)   
     The young disabled rebate (jonggehandicaptenkorting)  
    The elderly rebate (ouderenkorting)  
    The single elderly rebate (alleenstaande ouderenkorting)  
    The rebate for green investments (korting voor groene beleggingen)  
Taxation of non-resident taxpayers in the Netherlands   Tax registration of non-resident taxpayers in the Netherlands    
  The Dutch taxable income of non-resident taxpayers  Box 1 income: the income from labor and main residence for non-residents A permanent establishment or permanent representative in the Netherlands 
      Taxable wages derived from an employment exercised or previously exercised in the Netherlands 
    Box 2 income: the Dutch income from a substantial shareholding for non-resident taxpayers   
    Box 3 income: the Dutch income from savings and investments for non-resident taxpayers     
The creditable tax pre-payments for the levy of Dutch income tax      
The compensation of tax losses for individuals in the Netherlands        
Filing a Dutch Tax Return for resident and non-resident taxpayers      
Dutch income tax assessments, tax payments and tax refunds  The issuance of a preliminary assessment (voorlopige aanslag)    
  The issuance of a final assessment (definitieve aanslag)     
  The issuance of an additional assessment (navorderingsaanslag)    
  The issuance of an ex-officio assessment (ambtshalve aanslag)    
  The issuance of a conservering assessment (conserverende aanslag)     
  The payment term for Dutch income tax assessments     
  Remission of income tax debts     
  Provisional and final income tax refunds      
  Objection and appeal against assessments levied    
Employment Relationships Deregulation Act (DBA Act)- replacement of the VAR-Statement (Verklaring arbeidsrelatie or VAR)      

Viresh Bansraj

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