Income tax is a tax that you pay for your income. In this article, you will find more information on how to pay it and what you need to take into account.
First, the basics:
- The Belastingdienst (in Dutch) is the Tax and Customs administration of the Netherlands. It is part of the Ministry of Finance and is responsible for levying and collecting income, wealth and assets taxes (inkomstenbelasting) in the Netherlands, as well as for implementing various allowances and schemes for Dutch residents.
- Who actually has to pay tax? If you live in the Netherlands, receive income within the Netherlands, or have demonstrable ties to the Netherlands, you qualify as a resident taxpayer. This means that you will pay taxes on your entire income worldwide, so it makes no difference where in the world you earn your income. The Belastingdienst considers any business, employment, or investment earnings or income in the form of periodic benefits as taxable.
- The Dutch fiscal year runs from 1 January to 31 December, and the time frame for submitting income tax returns is from 1 March until 30 April. It is possible to request a further extension, but this must be done before the deadline. You can request an extension by contacting the Belastingdienst.
- The government imposes taxes based on the ability-to-pay principle, which means that the amount of tax you pay depends on your level of income.
- Tax revenues are used to provide residents with education, security and health care, as well as social security, motorways and railways, among others.
- A percentage of your monthly salary is automatically deducted by the Belastingdienst. At the end of each year, you (may) need to file a tax return (belastingaangifte) where you are required to declare your income and assets. You are sent a final tax notice and in some cases will receive some of the tax you paid back.
Scroll down to find our beginner’s guide to taxes in the Netherlands, where we explain the basic things you need to know to (begin to) understand the Dutch tax system.