Dutch tax residents pay income tax on their worldwide income, non-residents on income from Dutch sources.
There are three categories of income (boxes) for tax purposes:
1. Employment income, deemed income from housing, periodic payments, and business income. Such income is taxed at progressive rates:
2. Income from substantial participation in companies. Substantial participation means holding, individually or jointly with relatives, at least 5% of company shares. Profits from the sale of such investments and dividends on them are taxed at 26,9%.
3. Income from savings and investment. There is no tax as such on capital gains or current investment income (for example, dividends, interest, and royalties – unless it is business income). Instead, the taxpayer's net assets (assets less liabilities) are assessed as at 1 January. This value is used to calculate an annual fixed income taxed at the rate of 31%. There are various deductions and exemptions. The return on net assets is calculated using a special scale:
Dutch companies pay tax on their worldwide income. The standard income tax rate is 25,8%. The standard income tax rate is 25,8%. For companies with profits up to EUR 200 000, the tax rate is 19%.
Capital gains and dividends are included in the general tax base. However, such income is exempt from tax under the substantial participation exemption. This exemption applies if participation is at least 5% and a number of other conditions are met. Such conditions usually include the non-portfolio nature of the investment.
The exemption is also available if the subsidiary is taxed at a sufficient tax rate (at least 10%), and if less than 50% of the subsidiary’s assets are passive assets.
Dividends must not be deductible for corporate income tax by the distributing entity.
A foreign company is considered a controlled foreign company (CFC) if:
The passive income of a CFC is taxed in the hands of the Dutch controlling person.
CFC rules may disapply if the foreign company is engaged in genuine business activities.
Withholding tax is levied on dividends at the rate of 15%. The tax can be reduced under double tax treaties and EU directives.
Withholding tax is not levied on interest or royalties, except for payments to related parties in certain low-tax jurisdictions. In this case, the tax may be levied at the rate of 25%.
The standard VAT rate is 21%.
Some goods and services are subject to the reduced rate of 9%.
Employees pay a national insurance premium on remuneration up to EUR 38 098 at the rate of 27,65% (payable together with income tax).
Employers pay an employee insurance premium for income up to EUR 58 311 at rates depending on the industry. On average, the contribution is EUR 6 757 per year for a permanent employee and EUR 9 673 for temporary employees.
Employees pay compulsory health insurance contributions of about EUR 1 498, employers – at 7% on remuneration up to EUR 75 864.
There are some other premiums as well.
The tax is levied on the market value of the property at the rate of 8%.
A reduced rate of 2% applies when purchasing a property for living in it; in some cases, an exemption applies.
The tax may also be levied on the transfer of shares in a company with a significant share of real estate assets.
An annual tax is levied on immovable property owners at the municipal level.
The rates depend on the municipality; the tax base is the market value of the property.
The tax is levied on the market value of the gift or inheritance.
There are tax-exempt thresholds. Their size, as well as the tax rate (from 10% to 40%) depends on the degree of relationship between the parties.
The Netherlands has signed 104 Double Tax Treaties (DTT) with the following jurisdictions:
104 DTTs: Albania, Algeria, Argentina, Armenia, Aruba, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Benin, Bermuda, Bosnia Herzegovina, Brazil, Bulgaria, Canada, Caribbean Netherlands (Bonaire, Saint Eustatius, and Saba), Chile, China, Colombia, Croatia, Curaçao, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Ghana, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Iraq, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Korea (Republic of), Kosovo, Kuwait, Kyrgyzstan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malawi, Malaysia, Malta, Mexico, Moldavia, Montenegro, Morocco, Mozambique, New Zealand, Nigeria, North Macedonia, Norway, Oman, Pakistan, Panama, Philippines, Poland, Portugal, Qatar, Romania, Rwanda , Saudi Arabia, Serbia, Singapore, Sint Maarten, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Surinam, Sweden, Switzerland, Taiwan, Thailand, Tunisia, Türkiye, Uganda, Ukraine, United Arab, Emirates, United Kingdom, Uzbekistan, Venezuela, Vietnam, Zambia, Zimbabwe.
The Netherlands has signed and ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The Multilateral Convention entered into force for the Netherlands on July 1, 2019.
On October 29, 2014, Netherlands signed the Multilateral Competent Authorities Agreement on Automatic Exchange of Financial Account Information under the Common Reporting Standard (CRS MCAA), under which Netherlands receives information from its financial institutions and automatically exchanges this information with other jurisdictions on an annual basis. The automatic exchange began in September 2017.
In addition, on November 26, 2024, Netherland signed the Multilateral Agreement of Competent Authorities for the Automatic Exchange of Information under the Cryptoasset Reporting Framework (CARF-MCAA), which provides for the reporting of tax information on cryptoasset transactions on a standardized basis for the automatic exchange of such information.
There are no foreign exchange controls in the Netherlands.