In addition to tax brackets, there are income-related deductions for income up to €90,710. This reduces the effective tax rate.  If you have income from another country or if you live outside the Netherlands and have Dutch income, you will usually need to file the annual Dutch tax return. If you moved to or returned to the Netherlands during the year, filing your tax return can be a smart decision as you could be entitled to a significant tax refund. In 2021, if the tax base is less than €245,000, a corporate tax rate of 15% will apply. However, if the tax base is €245,000 or more, companies are required to pay a corporate tax rate of 25%. The Netherlands taxes its residents on their worldwide income; Non-residents are only subject to tax on income from certain sources in the Netherlands (mainly employment income, directors` fees, business income and income from Dutch real estate). If you are employed by a company, your income tax will be deducted from your salary by your employer, this is called payroll tax (which is included in payroll tax). If you are self-employed in the Netherlands, you must calculate and pay your income tax through the annual tax return. Self-employed and self-employed persons are considered to be entrepreneurs within the meaning of value added tax (VAT). This means that they have to levy and pay VAT on their income. If your income is low, you can apply for Kleineondernemersregeling.
Some services are exempt from VAT, such as journalists and translators. Withholding tax is a deduction of wages, benefits and pensions as an advance payment of income tax paid through the employer, etc. Under certain conditions, a life annuity is treated as a pension: premiums are deducted from income, benefits are taxed and the scheme is not recognised as an asset in box 3. The conditions concern the type of pension and necessity, based on the principle that the higher the income, the more pension you must accumulate more life annuity for the future, up to a maximum. Box 1 contains pension benefits, social benefits, wages, income attributable to other activities, non-cash wages (e.g. B company cars), real estate used by the owner, bonuses and other regular benefits. Income in box 1 is taxed at progressive rates. Payroll tax is the tax and other contributions deducted by the employer from an employee`s salary, which saves the employee from having to pay them later as income tax.
Payroll tax consists of your salary tax (payroll tax or loonbelasting) and social security contributions for pensions, unemployment benefits and other Dutch benefits and allowances. In 2018, the income tax brackets in Box 1 for people under official retirement age were as follows: A flat tax of 1.2% per annum is levied on the total value of savings and investments. It is nominally part of income tax, as a 30% tax on an assumed fixed return of 4% of the value of assets (regardless of the real income of assets). EUR 21 139 (2012; higher for low-income 65+ aged 65 and over) of the value of assets is exempt. For 2010, the total income tax (income tax plus mandatory pension, social security and government-funded medical care payments, all of which represent a percentage of income up to a maximum) for people under the age of 65 is as follows: If you become a resident of the Netherlands and earn income, you must file a Dutch tax return and pay taxes in the Netherlands. What does that mean? The deductible amount is deducted from the income indicated in box 1; If this is not sufficient, the remainder is deducted from the revenue in box 3 and finally from box 2. For 2010, the income tax for people under the age of 65 is as follows: In this overview, you will learn how the tax system works in the Netherlands, in particular the dutch annual income tax return. In the Netherlands, you pay taxes on your income, assets and assets. The Dutch tax system divides different types of taxable income into three boxes, each with its own rate, into the following groups: This table lists the income tax rates/levels (tarieven) for people under retirement age: From 2006 there will be a new national health insurance (zorgverzekering (swet), Zvw).
The premium depends in part on income and is paid in the form of a tax surcharge. It applies to « contribution income » (bijdrage-inkomen), which is part of Box 1, including income from work, social security benefits, pensions and life annuities (it does not include « income from owner-occupied housing »). It is withheld when payroll tax is due. The rate is 7.1% for e.B wages and 5% for e.B life annuities, in addition to the above tax percentages. The total income to which these rates apply is limited to approximately €50,000. All Dutch tax residents worldwide must pay Dutch taxes on their income. However, the tax treaty contains exceptions for certain types of global income. For the value of a condominium and related mortgage debt, this field applies and not field 3.
Based on the value of the apartment, a « fixed rental value » is counted, while interest on the mortgage is deductible. This is an important factor because the interest on a mortgage can easily exceed a thousand euros per month, which is deducted from income before an income tax is levied. If the value of an owner-occupied apartment is positive (the fixed rental value is higher than the interest), it will increase to zero. However, Dutch income tax law does not specify how the benefit of the 30% rule is to be shared between the employee and the employer. Some employers (p.B. Shell) have stipulated in their general working conditions that the 30% tax benefit goes exclusively to the company, arguing that the wages of their local workers would not be comparable to those of their foreign workers. The standard tax benefit of 30% is then split between an employee and the employer up to the level where the foreign employer had fictitiously paid income tax on the entire salary and surplus left to the company. The 30% verdict is a tax incentive for workers recruited abroad who bring specific skills to the Netherlands.
The tax benefit is calculated based on your gross annual salary. Of this total amount, 30% is exempt from income tax. In addition, with the exception of retirement bonuses, all your premiums, vacation pay and other benefits are subject to the decision. If you have this status, you are considered a non-resident taxpayer for part of the income tax. Essentially, if you choose to do so, you will pay less tax in the Netherlands. The fiscal year is the same as the calendar year. Before May 1, citizens must declare their income for the previous year. The scheme includes income tax at the expense of the General Old-Age Pension Scheme (AOW), the Pension Scheme for The Partners of The Deceased (ANW) and the National Insurance Scheme for Special Medical Care (WLZ). If you live abroad but have income in or from the Netherlands or have property in the country, you can choose to be treated as if you had resident taxpayer status throughout the year.
If you use this option, you will also indicate your worldwide income in the Netherlands. The value of your tax credit depends on how much you earn and decreases with increasing income: The Netherlands uses a « box » method that categorizes different types of income into different categories or « boxes » that are taxed at different rates for each box. The 30% refund decision is a tax advantage for some expatriate employees in the Netherlands. The most important advantage is that the tax base of your Dutch gross salary is reduced from 100% to 70%. Thus, 30% of your salary is tax-free. Visit the 30% rules page for more information. For taxpayers above the official retirement age, reduced rates apply for the first two stages. In 2019, the corresponding tax rates are 18.75% and 20.20% respectively.  The deduction of 17.9% of income in these brackets corresponds to AOW contributions not due by AOW beneficiaries. In 2018, the retirement age in the Netherlands was raised from 65 years and 9 months to 66 years.  The Netherlands taxes other types of income in addition to wages.
There is a tax treaty between the United States and the Netherlands that defines how citizens of one country who live in the other country are taxed. The taxpayer`s residency status usually determines which country receives the taxes. The tax treaty also helps to eliminate double taxation of dual citizens and clarifies tax issues that might otherwise not be clear. Box 2 covers income from a holding or substantial participation (at least 5 %) in a limited liability company such as BV. In 2021, box 2 income will be taxed at 26.90%. In 2020, this figure was 26.25%, and in 2018 and 2019, the income in box 2 was taxed at 25%. When you move to the Netherlands, you get resident taxpayer status. This means that you pay income tax and social security contributions.
However, if you have specific expertise, you may be subject to special tax regulations. The financial year in the Netherlands runs from 1 January to 31 December. The filing period for your annual tax return usually runs from March 1 to May 1 of the following year. If you miss the deadline, you will receive a fine. .