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Measures List
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Measure Name
Date when measure came into force
Reduction of first bracket rate, etc. 2011/01/01
Changes in PIT 2012/01/01
Reform of Personal Income Tax 2013/01/01
Results 1 - 3 of 3.

Generic Tax Name Personal income tax
Tax name in the national language Inkomstenbelasting
Tax name in English Personal income tax
Member State NL-Netherlands
Tax in force since 2001/01/01
If abolished, date on which the tax ceases to apply
Business version date 2013/01/01
Version date 2013/02/28
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other

Social security contribution Employers
Employees
Other
 
Legal base

 

Income Tax Law, 2001 (Stb. 2001,1), Wage Tax Law 1964 (Stb. 1964, 514).

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments

 
Geographical Scope

 
Taxpayers
Domestic-source income of non-residents is Taxed
Not Taxed
Comments

Individuals living in theNetherlands(resident taxpayers) and individuals who do not live in theNetherlandsbut who receive income from theNetherlands(non-resident taxpayers) are liable to income tax. Residents are taxed on their entire income, regardless of the place of origin (worldwide). Non-residents are only taxed on income directly connected with the territory of theNetherlands, unless the non-resident chooses to be treated as a resident for taxation under the personal income tax. 

For the following categories, the tax on their wage is being withheld by their employer in the form of Wage Tax. The Wage Tax is an advaced payment of the Personal Income Tax. The categories are:

  • Individuals, resident and non-resident, who are in paid employment in theNetherlands.
  • Individuals resident abroad who are in paid employment by a Dutch public body.
  • Individuals resident abroad who are members of the board of management or the supervisory board of a company established in theNetherlands.
  • Professional entertainers and professional sportsmen, irrespective of whether they are employed or not.

Employment incomes of married couples are Taxed jointly
Taxed separately
Comments

Fiscal partners

Income tax is in principle levied on an individual basis. Fiscal partners are permitted to allocate joint income between them for their tax return. Fiscal partners are spouses and registered partners. In addition, unmarried couples living together are fiscal partners when one of the following conditions are met:

  • they signed a notary's living together contract  
  • both partners are the parents of the same child
  • one of the partners has a child and the other partner has acknowledged that child
  • they are partners for a specific regulation concerning pensions
  • they are both the official owners of a dwelling which is their main residence

Joint elements of income are the taxable income from an owner-occupied dwelling, taxable income from substantial interest (box2), taxable income from savings and investments (box3) and the personal tax deductions.



Comments
 
Tax object and basis of assessment
As general rule, taxable income under personal income tax includes























Comments

Tax base

Income tax is levied on the taxable income of natural persons and is reduced by the amount of (general) levy rebates.


Three categories of taxable income

There are three categories of taxable income (box 1, 2 and 3) for income tax, each type of taxable income having its own rate:

  • Box 1 taxable income from work and dwellings
  • Box 2 taxable income from substantial participation
  • Box 3 taxable income from savings and investments.

The income tax payable is the aggregate amount of the tax on the taxable income in the three boxes. The income of resident taxpayers is reduced by the amount of the personal tax deductions.

 

1. Taxable income from work and dwellings (box 1)

Taxable income from work and dwellings is the aggregate amount of:

  • taxable profits from business activities
  • taxable wages
  • taxable income from other activities (income from activities that can not be qualified as wage, nor as profits from business activities such as freelance income and income from making available assets to companies in which the taxpayer has a substantial interest, e.g. renting of premises to the company)
  • taxable periodical payments and grants (e.g. some periodic payments provided for under public law)
  • taxable income from an owner-occupied dwelling
  • expenditure for income provision (e.g. the premium for retirement annuities)
  • negative expenditure for income provision (e.g. annuities that are liable tot tax / taxable and that were previously deducted from income)
  • the negative personal allowance (e.g. refunds for expenses that have been deducted from the income in a previous year as a personal deduction)
  • personal deductions (this deduction may partly run over into box 3 and after that possibly into box 2).

Taxable income from owner-occupied dwellings is the balance of the imputed rental value of the dwelling and the interest paid on the mortgage. Up to 2012 paid interest was fully deductible for a period of thirty years.

As of January 2013, new mortgages need to be paid off in full (and at least as annuity) over the course of the loan agreement of 30 years in order to continue to obtain access to the mortgage interest deduction facility.

 

2. Taxable income from substantial interest (box 2)

A taxpayer is regarded as having a substantial participation if he, either alone or together with his partner, holds, directly or indirectly, at least 5% of the shares in a corporation. Income from substantial participation is the aggregate amount of the dividends received and the proceeds from disposal (profits from the sale of shares and profit-sharing certificates).

For non-residents, income from a substantial participation is only subject to tax if the substantial interest is in a company resident in theNetherlands. When a company is resident for at least five years, the company is deemed to be resident for ten more years after moving the place of effective management.

 

3. Taxable income from savings and investments (box 3)

The tax levied on income from savings and investments is based on the assumption that a taxable yield of 4% is made on the net assets, irrespective of the actual yield (such as interest, dividend, capital gains and losses). The net assets (the fair market value of the assets after the deduction of the fair market value of the debts) are valued at the beginning of the calendar year.

Assets and debts only are taxed in box 3 if they do not fall in box 1 or 2.

Examples of assets and debts that could fall in box 3:

  • savings
  • a second home or a let property
  • shares and other securities
  • annuity insurances for which the premium is non-deductible
  • an endowment insurance not linked to the taxpayer's own home
  • consumer loans

Certain assets are not taken into account in calculating the value of the assets.

This applies, for example, to:

  • assets which are used to generate proceeds which are taxed in the boxes 1 or 2 (examples are assets deployed in the business of a self-employed entrepreneur, owner-occupied dwellings, shares in a company in which the taxpayer has a substantial interest, etc.)
  • movable property kept for personal use
  • works of art and science not kept as an investment
  • investments in funds with a green or social and ethical purpose, up to a maximum of € 56,420 per person 

A taxpayer may not deduct all debts in box 3. For example, the mortgage debt for an owner-occupied dwelling (the interest on this is deductible in box 1). Also tax debts are not deductible. The first € 2,900 of the other debts may not be deducted from the assets. The income inbox 3 may not be negative, not even if the amount of the debt is greater than the amount of the assets.

In box 3 taxpayers are entitled to a tax-free threshold of € 21,139 (tax-exempt capital).

Depending on their income and wealth, taxpayers aged 65 and older are entitled to an additional threshold up to a maximum of € 27,984.

Non-resident taxpayers are only taxed on income from savings and investments in theNetherlands. The profit base in the Netherlandsis the value of assets in the Netherlands less the value of debts connected with the assets, likewise in the Netherlands. Assets in the Netherlands are:

  • real estate (including rights to real estate) in the Netherlands
  • rights to shares in the profits of a company the management of which is established in the Netherlands, as long as it does not arise from shareholdings or employment.

Income considered Domestic income
Worldwide income (subject to double-tax relief)
Comments

Benefits in kind
The following benefits in kind are usually (partially or fully) taxable












Comments

Beneifits in kind are taxed to employers under the wage tax. The wage tax is payed by employers and considered an advanced payment of the personal income tax for employees. Since 2011, benefits in kind are exempted from wage tax, and therefore from incometax, up to 1.5% of the total amount of taxable wage payed by the employer. Benefits in kind above that percentage are taxed with wage tax at a rate of 80%. This is equivalent to a tax rate of 44.4% on the gross value (net value + taxes) of the benefit in kind.



Comments
 
Deductions, Allowances, Credits, Exemptions
Deduction for professional expenses.
The deduction is:





Comments

Deductions from the tax base
The following items are usually (partially or fully) deductible

















Comments

Other deductions are:

  • Expenses for temporarily home-stay of severely handicapped.
  • Expenses for maintenance of monumental dwellings.
  • Deduction for self-employed, only for entrepreneurs/self-employed from the total amount of profit : EUR 7,280
  • Above that, there is an allowance for SME's of 14 % of the profit after deducting the above mentioned deduction for self-employed.

Allowances
The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child
Additional allowance for 2nd child
Additional allowance for 3rd child
Additional allowance for additional child
Additional allowance for old age dependents
Comments

Credits
The basic yearly credit for an individual amounts to: 2,001.00  EUR/National currency  or  %  of tax base
The basic yearly credit for a couple amounts to:
Additional credit for 1st child
Additional credit for 2nd child
Additional credit for 3rd child
Additional credit for additional child
Additional credit for old age dependents 1,032.00  EUR/National currency  or  %  of tax base
There are tax credits for:

















Comments

Tax credit

Tax due from resident taxpayers is reduced by a tax credit. The general tax credit applies to all resident taxpayers and comprises a tax element and a social security contribution element. Entitlement to the contribution element of the tax credit only applies if the employee has compulsory Dutch social security coverage. For couples: When one of the spouses has income that isn't sufficient to take advantage of the full tax credits, the general tax credit is payed out to that spouse under the condition that the most earning spouse pays enough tax and SSC to finance that.

In addition to the general tax credit, there are all kinds of supplementary credits that take account of the amount of income earned and the taxpayer's personal circumstances.

  • the Earned Income Tax Credit (only for the working; dependent on income); max EUR 1,723, from an income of EUR 40,428 gradually declining to EUR 550
  • the Tax Credit for combining work and child care (for single parents and the parent with the least income of a couple): max EUR 2,133the Tax Credit for single parents (EUR 947, climbing with income to EUR 2,266)
  • the Tax Credit for Young Disabled (EUR 708)
  • the Tax Credit for people older than 65 (in the above table; for incomes exceeding EUR 35,450 it is EUR 150)
  • the Tax Credit for single people older than 65 (EUR 429)
  • the Tax Credit for Working People, aged 60-63 with low incomes (max EUR 1,100)

The Tax on Wages and the Personal Income Tax are collected simultaneously with national social security contributions (volksverzekeringen). The above mentioned tax credits include a tax element and a social security contribution element. Taxpayers older than 65 no longer pay contributions for the State Pension (AOW). Therefore, their combined rate of tax and social security premiums is reduced by 17.9 %-point. The tax credits are reduced accordingly. 

Employers may avail themselves of a reduction in wage tax and contributions for some specified groups of employees. In such a case employers may remit a lesser amount in wage tax and social security contributions. Lower remittances exist to stimulate professional education, research & development and shipping.

Dividend tax and wage tax are advanced payments on the personal income tax and can thereby be credited with the personal income tax.


Losses
Losses can be
Carried-forward for Indefinite
 Years
Carried-back for Indefinite
 Years
Transferred to spouse or partner
Comments

Losses can only be offset within box 1 en 2. Setting off losses across boxes is not allowed.


Exemptions
The following income is exempted from income tax























Comments


Comments
 
Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From  0.00  EUR/Natcur
To  19,645.00  EUR/Natcur
Rate: 37.00 %
Bracket 2 From  19,645.00  EUR/Natcur
To  33,363.00  EUR/Natcur
Rate: 42.00 %
Bracket 3 From  33,363.00  EUR/Natcur
To  55,991.00  EUR/Natcur
Rate: 42.00 %
Bracket 4 From  55,991.00  EUR/Natcur
To   EUR/Natcur
Rate: 52.00 %
Comments

The rate structure described above applies to taxpayers under the age of 65.

Separate rates apply for persons aged 65 or over. This separate rate concerns the fact that these taxpayers are no longer required to pay Old-Age Pension (AOW) contributions of 17.90 %. They still pay contributions under the Generals Exceptional Medical Expenses Act (AWBZ) and General Survivors' Pension Act (ANW).

The rates for persons aged 65 or over:

  • bracket 1: from 0.00 EUR to 19,645: rate: 19.10 % (tax: 5.85 %: social security contribution: 13.25 %)
  • bracket 2: from 19,645 EUR to 33,363 EUR: rate: 24.10 % (tax: 10.85 %: social security contribution: 13.25 %)
  • bracket 3: from 33,563 EUR to 55,991 EUR: rate: 42.00 % (tax: 42.00 %: social security contribution: 00.00%)
  • bracket 4: from 55,991 EUR: rate: 52 % (tax: 52.00 %: social security contribution: 00.00%) 

For employees earning more than EUR 150,000, the Wage Tax, payable by their employer is increased by 16% of the amount exceeding EUR 150,000

The Wage Tax includes a special withholding tax rate for non-resident professional entertainers and professional sportsmen. The fixed rate is 20 % of all gross receipts, including allowances for expenses. However, with the permission of the tax inspector, estimated expenses may be deducted. The 20 % withholding tax is possibly final. Non-resident entertainers and sportsmen may opt to file in an income tax declaration or opt to let the withholding tax be final. In case they file in an income tax declaration, the progressive rates will apply and the actual costs may be deducted. Furthermore, besides an individual entertainer of sportsman, a team, orchestra, etc. may be subject to 20 % withholding tax.

Box2

There is a fixed rate of 25.00 %.

Box3

There is a fixed rate of 30.00 % of an imputed rate of return of 4 % of the fair market value of the assets minus debts at the beginning of the calendar year.

The above amounts and rates are valid for 2013. Indexation takes place each year.


Regional taxes
Regional taxes are (rate in capital region) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Local/municipal taxes
Local taxes are (rate in capital city) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Special surcharges
There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Separate taxation
Separate taxation applies to the following items: Employment income
Income from business or self-employed activities
Income from sport and entertainment activities
Benefits in kind (company car, meal cheques, etc)
Pension income
Owner-occupied immovable property
Dividends 30.0 %
Interests from government bonds 30.0 %
Interests from corporate bonds 30.0 %
Interests from special saving accounts 30.0 %
Interests from deposits 30.0 %
Royalties
Income from renting immovable property 30.0 %
Income from renting movable property
Capital gains on immovable property 30.0 %
Capital gains on movable property
Inheritance
Annuities from life insurance
Prizes and awards
Scholarships
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities
Comments

Dividends, interests and income from immovable property are taxed in box 3 of the Personal Income Tax. The rate is 30% on imputed returns at 4% of the value of the assets.

Inheritance, and gifts are subject to Inheritance Tax.

Revenues from lotteries and games activities are subject to Tax on Games of Chance


Withholding taxes
The tax is withheld when paid to residents on: Dividends: 15.00 %
Final Creditable
Interests from governments bonds:
Final Creditable
Interests from corporate bonds:
Final Creditable
Interests from special saving accounts:
Final Creditable
Interests from deposits:
Final Creditable
Comments

Tax on dividends is withheld under the Dividend Tax. Paid dividend tax is creditable to the personal income tax.



Comments
 
Tax due date

Income tax returns have to be filed each year with the tax administration by April 1 of the year following the relevant tax year. If the tax administration does not receive the return on time, it sends a reminder and may impose a fine. It is possible to apply to the tax administration in writing for a deferment. Everyone who files his or her return by April 1 receives notification from the tax administration by July 1 of the same year.

 
Tax collector

Personal income tax is levied annually by the tax administration. It is assessed on the basis of the taxpayer's declaration.

 
Special features

The 30% facility for expatriates

Expatriates employed in theNetherlandson a temporary basis may in certain situations avail themselves of the 30% facility. This facility allows the employer to grant a tax-free lump-sum allowance for the extra costs of the employee's stay in theNetherlands(extraterritorial costs). This lump-sum allowance amounts to a maximum of 30% of the sum of the wages and the allowance. If the actual costs are higher, they may be reimbursed free of tax. The facility applies to employees coming from outside theNetherlands, who have been recruited by or seconded to a Dutch employer and who satisfy certain conditions. The school fees paid for children to attend an international school may be reimbursed free of tax in addition to the lumpsum allowance for the extraterritorial costs.

Professional costs that cannot be designated as extraterritorial costs may also be reimbursed tax-free in accordance with the normal rules.

 
Economic function







Comments

 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d51ab + d51aa

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2011 46,693.00 EUR 7.26
2010 48,178.00 EUR 7.63
2009 47,579.00 EUR 7.70
2008 40,494.00 EUR 6.34
2007 40,023.00 EUR 6.53
2006 35,163.00 EUR 6.07
2005 30,857.00 EUR 5.66
2004 26,493.00 EUR 5.06
2003 28,149.00 EUR 5.56
2002 28,306.00 EUR 5.72
2001 23,347.00 EUR 4.90
2000 22,153.00 EUR 4.94

Comments