The Dutch tax system
The Dutch tax system can feel complex at first, especially if you are new to the country. This guide breaks it down in a clear and practical way, so you know what to expect and how the system works.
The Netherlands applies taxes to income, property, consumption, and assets. As a resident taxpayer, you may encounter taxes related to employment, housing, vehicles, inheritance, gifts, and even everyday activities such as parking or waste disposal.
For expats, understanding how taxes work across borders is especially important. Managing income, savings, and payments between countries can add another layer of complexity. Having efficient international money management tools can make meeting tax obligations easier and more predictable.
This article provides an overview of the Dutch tax system, including:
- The tax system in the Netherlands
- Who pays tax in the Netherlands?
- How does Dutch tax work for expats?
- Do I need a tax ID number in the Netherlands?
- Types of tax in the Netherlands
- Dutch income tax
- Social security
- Corporate tax
- Value Added Tax
- Import and export tax
- Dutch property tax
- Municipal tax
- Road and parking tax
- Environmental tax
- Capital gains tax
- Dutch gift tax
- Inheritance tax
- Funeral rights
- Tax avoidance and evasion in the Netherlands
- What if I don’t do my taxes on time or at all?
- Where to find tax advice in the Netherlands
- Useful resources
The tax system in the Netherlands
Anyone who lives in or does business in the Netherlands is subject to Dutch taxes on income, wealth, and certain assets. These taxes fund public services such as healthcare, education, infrastructure, and social security.
In 2024, the Dutch government was projected to collect approximately €403 billion in tax revenue, mainly from income tax, social security contributions, and Value Added Tax (VAT).
Most taxes are administered by the Belastingdienst (Dutch Tax Office). Other authorities include local municipalities, water boards, and the Dienst Wegverkeer (RDW).
The Netherlands uses a progressive income tax system. This means the more you earn, the higher the tax rate applied. In 2025, the highest income tax rate is 49.5%.
Who pays tax in the Netherlands?
The Dutch Tax Office distinguishes between three taxpayer categories:
- Resident taxpayers – taxed on worldwide income
- Non-resident taxpayers – taxed only on Dutch-source income
- Partial non-resident taxpayers – taxed on Dutch income, with limited exemptions
Tax residency is determined by facts and circumstances, such as where you live, work, and maintain personal ties. Indicators include:
- Having a primary residence in the Netherlands
- Family members living in the country
- Employment in the Netherlands
- Dutch health insurance
- Children attending school in the Netherlands
If you live abroad but earn income from Dutch sources, you are usually considered a non-resident taxpayer.
The option for partial non-resident tax status under the 30% ruling was abolished on 1 January 2025. Transitional rules allow eligible expats to benefit until the end of 2026.
How does Dutch tax work for expats?
Expats are taxed under the same rules as Dutch nationals, depending on their tax residency status.
The Netherlands has tax treaties with around 90 countries to prevent double taxation. If income is taxed in two countries, relief may be available through credits or exemptions.
If no tax treaty applies, the Double Taxation Decree 2001 determines how income is taxed. In disputed cases, a mutual consultation procedure can be initiated between tax authorities.
For expats handling income and taxes in multiple currencies, managing funds efficiently is essential. Services like Wise allow users to hold, convert, and transfer money using the mid-market exchange rate with transparent fees, which can help when paying taxes or moving funds internationally.
Do I need a tax ID number in the Netherlands?
There is no separate tax ID number. Taxes are linked to your BSN (Burgerservicenummer), which you receive when registering in the BRP (Personal Records Database).
If you stay in the Netherlands for fewer than four months, you must register with the RNI (Non-residents Records Database) to receive a BSN.
Types of tax in the Netherlands
Residents and businesses in the Netherlands may encounter various national and local taxes.
Dutch income tax
Income tax applies to earnings from employment, pensions, benefits, business income, investments, and property.
Employers and pension providers usually withhold wage tax in advance, reducing the amount due when you file your annual return.
For expats receiving income from abroad, efficient international payment handling can help avoid unnecessary fees and preserve income value before tax filing.
Social security
Social security contributions fund pensions, survivor benefits, unemployment insurance, and long-term care.
There are two main schemes:
- National insurance (volksverzekeringen) – paid by employees
- Employee insurance (werknemersverzekeringen) – paid by employers
In 2025, employees contribute 27.65% to national insurance. Overpayments are refunded through the annual tax return.
Corporate tax
Business taxation depends on the legal structure:
- Freelancers and sole traders pay income tax
- Partnerships pay income tax per partner
- Limited companies (BV) pay corporate tax
The corporate tax rate is 19% on profits up to €200,000 and 25.8% above that.
International businesses can streamline payments and accounting using Wise Business, which supports batch payments, multi-currency accounts, and accounting integrations.
Advertising tax
Municipalities may charge advertising tax on visible commercial signage. Rates vary by city.
Value Added Tax
VAT (BTW) applies to most goods and services.
- Standard rate: 21%
- Reduced rate: 9%
- Zero rate: selected exports and exemptions
Visitors from outside the EU may claim VAT refunds on qualifying purchases.
Small businesses with turnover under €20,000 may apply for the KOR scheme, which exempts them from charging VAT.
Import and export tax
Imports are subject to customs duties and VAT. Excise goods face additional levies.
Dutch property tax
Property owners pay several taxes based on the WOZ value:
- Notional rental value
- Real estate tax (OZB)
- Movable property tax (RZB)
Second homes fall under Box 3 taxation.
Property transfer tax
Buyers usually pay property transfer tax:
- 2% for residential property
- 10.4% for non-residential property
Municipal tax
Households pay municipal and water authority taxes, including waste, sewerage, and flood protection levies.
Environmental tax
Environmental taxes include plastic levies, carbon tax, energy tax, flight tax, and groundwater levies.
Capital gains tax
The Netherlands does not tax capital gains directly. Instead, it assumes a notional return on assets under Box 3, which is then taxed.
Gaming tax
Prizes over €449 are subject to gaming tax at 34.2% in 2025.
Dutch gift tax
Gift tax applies to donations from Dutch residents or former residents.
Rates depend on the relationship between donor and recipient. Several exemptions apply, including annual parental gifts and educational support.
Inheritance tax
Inheritance tax applies if the deceased had sufficient ties to the Netherlands.
Tax-free thresholds and rates depend on the relationship to the deceased. Returns must be filed within eight months.
Funeral rights
Municipalities charge fees for burial or cremation services. Costs vary by location.
Tax avoidance and evasion in the Netherlands
Tax evasion is illegal and punishable by fines or prosecution. Large-scale fraud is investigated by the FIOD.
What if I don’t do my taxes on time or at all?
Late filing or non-payment can lead to reminders, fines, asset seizure, and court action. Payment plans or tax waivers may be available in hardship cases.
Where to find tax advice in the Netherlands?
This guide is for informational purposes only. Always consult a qualified tax advisor for personal advice.
Expat-friendly tax advisors include:
- Expat Service
- HBK Expat Consultants
- Sol Tax Advisors
- Suurmond Tax Consultants
- Taxback
Conclusion
The Dutch tax system is comprehensive but structured. Once you understand the basics, compliance becomes much more manageable.
For expats and international businesses, combining professional tax advice with efficient financial tools is essential. While tax advisors handle compliance, managing money across borders is equally important.
A multi-currency account such as Wise can help expats and businesses send, receive, and hold money in multiple currencies without hidden exchange-rate markups, making it easier to manage international tax obligations alongside everyday finances.
Useful resources
- Belastingdienst – official tax information
- Vereniging van Nederlandse Gemeenten
- Register of Dutch Municipalities
- Business.gov.nl