The fiscal year is the same as the calendar year. Before May 1 citizens have to report their income from the previous year. The system integrates the income tax with fees paid for the general old age pension system (AOW), the pension system for partners of deceased people (ANW), and the national insurance system for special medical care (WLZ).
There are three categories of income, each with their own tax rates. They are referred to as "boxes".
Box 1 Tax Rate Brackets (2010–present, under pension age)
2024
€0 – €38,098
€38,099 – €75,518
over €75,518
36.97%(9.32% + 27.65%)
36.97%
49.50%
2023
€0 – €37,149
€37,150 – €73,031
over €73,031
36.93%(9.28% + 27.65%)
36.93%
49.50%
2022
€0 – €35,472
€35,473 – €69,398
over €69,398
37.07%(9.42% + 27.65%)
37.07%
49.50%
2021
€0 – €35,129
€35,130 – €68,507
over €68,507
37.10%(9.45% + 27.65%)
37.10%
49.50%
2020
€0 – €34,712
€34,713 – €68,507
over €68,507
37.35%(9.70% + 27.65%)
37.35%
49.50%
2019
€0 – €20,384
€20,385 – €34,300
€34,301 – €68,507
over €68,507
36.65%(9.00% + 27.65%)
38.10%(10.45% + 27.65%)
38.10%
51.75%
2018
€0 – €20,142
€20,143 – €33,994
€33,995 – €68,507
over €68,507
36.55%(8.90% + 27.65%)
40.80%(13.15% + 27.65%)
40.80%
51.95%
2017
€0 – €19,982
€19,983 – €33,792
€33,793 – €67,072
over €67,072
36.55%(8.90% + 27.65%)
40.80%(13.15% + 27.65%)
40.85%
51.95%
2016
€0 – €19,922
€19,923 – €33,715
€33,716 – €66,421
over €66,421
36.55%(8.40% + 28.15%)
40.40%(12.25% + 28.15%)
40.40%
52.00%
2015
€0 – €19,822
€19,823 – €33,589
€33,590 – €57,585
over €57,585
36.50%(8.35% + 28.15%)
42.00%(13.85% + 28.15%)
42.00%
52.00%
2014
€0 – €19,645
€19,646 – €33,363
€33,364 – €56,531
over €56,531
36.25%(8.10% + 28.15%)
42.00%(13.85% + 28.15%)
42.00%
52.00%
2013
€0 – €19,645
€19,646 – €33,363
€33,364 – €55,911
over €55,911
37.00%(5.85% + 31.15%)
42.00%(10.85% + 31.15%)
42.00%
52.00%
2012
€0 – €18,945
€18,946 – €33,864
€33,865 – €56,491
over €56,491
33.10%(1.95% + 31.15%)
41.95%(10.80% + 31.15%)
42.00%
52.00%
2011
€0 – €18,628
€18,629 – €33,436
€33,437 – €55,694
over €55,694
33.00%(1.85% + 31.15%)
41.95%(10.80% + 31.15%)
42.00%
52.00%
2010
€0 – €18,218
€18,219 – €32,738
€32,739 – €54,367
over €54,367
33.45%(2.30% + 31.15%)
41.95%(10.80% + 31.15%)
42.00%
52.00%
For people above the pension age, the social security component is reduced. Additionally, there are income-dependent deductions and tax credits for incomes up to €90,710 which decrease the effective tax rate.[1]
Under certain conditions a life annuity is treated as a pension: premiums are deducted from the income, the benefits are taxed, and the scheme is not counted as asset in box 3. The conditions concern the type of life annuity and the necessity, based on the principle that the higher the income is, the more pension plus life annuity one needs to build up for the future, up to a maximum.
For the value of an owner-occupied dwelling and for mortgage debt related to that, this box and not box 3 applies. Based on the value of the dwelling, a "fixed rentable value" is counted, while interest for the mortgage is deductible. This is an important factor, since interest on a mortgage can easily be over a thousands euros per month, which is subtracted from income before any income tax is applied. If the value of an owner-occupied dwelling would be positive (fixed rentable value is greater than interest) it is changed to zero.
For taxpayers above the official retirement age reduced rates apply for the first two brackets. In 2019, the corresponding tax rates are 18.75% and 20.20%.[2] The discount of 17.9% of the income in these brackets corresponds to the AOW contributions, which are not owed by the AOW beneficiaries. In 2018, the retirement age in the Netherlands was postponed from 65 years and 9 months to 66 years.[3]
For employed and self-employed people there is an employment rebate.
The wage withholding tax is a deduction of wages, social security benefits and pensions, as an advance payment for the income tax, paid through the employer, etc.
From 2006 there is a new national health insurance scheme (zorgverzekering(swet), Zvw). The premium is partly income-dependent and paid as a tax supplement. It applies for the "contribution income" (bijdrage-inkomen), which is part of box 1, including labor income, social security benefits, pensions, and life annuities (it does not include the "owner-occupied dwelling income"). It is withheld if the wage withholding tax applies. The rate is 7.1% for e.g. wages and 5% for e.g. life annuities, coming on top of the tax percentages mentioned above. The total income for which these rates apply is limited to ca. 50,000 euro.
Tax on income from a substantial business interest (box 2)
Prior to 2024, there was a flat tax of 26.9% on income from a substantial business interest, usually meaning a (direct or indirect) shareholding of at least 5% in a private limited company (BV). As of 2024, this has become a two-bracketed tax consisting of a rate of 24.5% on the first €67,000 of income and 33% on the excess.
If the fiscal partner of the taxpayer or a blood relative (first vertical kin) holds a substantial interest in a company, the shares of the taxpayer constitute a substantial interest, even if they do not amount to 5%.
Income from substantial interest includes:
dividends
capital gains (except in case of succession and divorce)
For 2007 only there was a reduced rate ranging from 22 to 25%.
As of 2024, there is a tax of 36% on the assumed return on bank savings and other assets if their total value exceeds €57,000. Each type of investment has a different assumed rate of return associated with it.
There is an exemption for money invested in approved "green" investments up to a certain limit. Moreover, a tax credit per year of 0.7% of the value is applied for these investments. The credit only counts towards box 3.
The sum of the incomes in the three boxes is the "threshold income". It determines thresholds for tax deductions, e.g. for gifts (see below).
The deductible amount is subtracted from the income in box 1; if this is not enough, the remainder is subtracted from the income in box 3, and finally from box 2.
Gifts
The Dutch Tax Service can declare an institution to be an "institution for general benefit" (algemeen nut beogende instelling, ANBI). Often this is a foundation (stichting). It can also be a voluntary association (vereniging), but not e.g. a sport club, or association of personnel. Also it cannot be a commercial institution.[4]
If the sum of someone's gifts to ANBIs exceeds 1% of the threshold income, the excess, with a maximum of 10% of that income, is deductible income.
Total tax
The total tax is the sum in the three boxes, minus the general tax credit (algemene heffingskorting, a maximum of €3070 as of 2023) and labor tax credit (arbeidskorting, a maximum of €5052 as of 2023) that both are income-dependent. These are not to be confused with a tax deduction[nl]). The resulting amount of tax may be less than zero, in which case the amount is partially paid out, provided that one has a spouse and the tax of both together is not less than zero.
The 30% ruling
The 30% ruling is a personal income tax reduction for select employees in the Netherlands. It applies to specialized foreign employees who are brought to the Netherlands because their skills are scarce in the Dutch marketplace. The scarcity of work force with particular skills is reviewed annually.[5] The 30 Percent Rule allows an employer to exempt from income tax up to 30% of the employee's annual remuneration (the "Basis") and used to be applicable for the first 10 years of their stay in the Netherlands, but is currently for the first five years of employment in the Netherlands Inkomstenbelasting Wet 2001.
The purpose of the 30 Percent Rule to compensate employees for the extra costs of their temporary stay in the Netherlands. The effect is to make the Netherlands competitive in the international marketplace for skilled labour, since normal Dutch income tax rates are high (in comparison with other countries) and may discourage some employees from accepting assignments in the Netherlands.
However, there are consequences for possible future unemployment aid, tax deduction for a mortgage, pension contributions, and other benefits.
The Dutch tax authority allows for two options:
30% tax-free is reimbursed based on registered receipts for extraterritorial costs (e.g. maintenance of an own house in the country of origin, travel expenses, relocation costs, language courses, long-distance telephone calls)
the Dutch tax office can, upon an approved application of an employee, grant a 30% tax exemption on the employees remuneration.
In addition, the employer may provide a tax-free reimbursement for tuition fees when the employee's children attend an international school.
The Dutch income tax law does not, however, specify how the benefit of the 30% rule should be divided between the employee and the employer. Some employers (e.g. Shell) have stipulated in their general working conditions that the 30% rule income tax benefit is solely for the benefit of the company, arguing that salaries of their local workers would not be on par with their foreign work force. The 30% rule income tax benefit is then divided between an employee and the employer up to the level as if the foreigner employer fictively paid the income tax on the entire salary and the surplus left to the company.
A similar rule also applies to compensate Dutch employees who are assigned to work in designated developing countries or to the Dutch nationals returning to the Netherlands after a substantial period of living abroad (10 years or longer).
Note that the formal application typically takes two to three months. The excess tax paid in the meantime will be repaid to the applicant once the 30% tax exemption is granted.
Eligibility for the 30 percent rule is subject to a set of conditions, including:
The foreign employee was recruited outside the Netherlands or transferred from another country by their employer.
The foreign employee possesses expertise absent or scarce in the Dutch labour market. Fulfilment of this condition is based upon gross salary, which must exceed a given minimum amount after the exemption is applied. In 2023, the threshold gross salary was €41,954 (€59,934 including the tax-free 30% allowance). A lower requirement applies for employees under the age of 30 who have obtained a master's degree or its equivalent at a Dutch or foreign university; in 2023, the respective minimum gross salary amounted to €31,891 (€45,559 including the tax-free 30% allowance). No minimum salary threshold exists for researchers under EU directives.
In the 24 months prior to first day of employment in the Netherlands, the foreign employee lived outside of the Netherlands for more than 16 months, more than 150 kilometres away from the Dutch border.[6][7] An exception exists for all Ph.D. students who recently graduated (within the previous 12 months), where the 150 km distance rule need only have been met for 16 out of the 24 months before the start of Ph.D. study.
The applicable period was originally 10 years. New legislation came in to force as per 1 January 2012, limiting the applicable period of the rule from 10 to 8 years, with a 5-year transition period. Also, foreign students acquiring a PhD in the Netherlands are eligible for the 30% ruling, even though they were not hired from abroad "Changes in 30% rule". In 2017 the new governmental coalition planned to reduce the tax break from 8 years to 5 years.[8] However, in the 2018 budget speech, the finance minister retroactively reduced the 30% tax rule to end by Jan 2019 for all beneficiaries if over 5 years, irrespective of an earlier approval for a later end date (many cases up to 2022).
Tax treaties
The Netherlands has established nearly 100 bilateral tax treaties with other countries to prevent the issue of double taxation. The overview is available at the website Dutch Tax and Customs Administration.[9]
A pay-as-you-earn tax (PAYE), or pay-as-you-go (PAYG) in Australia, is a withholding of taxes on income payments to employees. Amounts withheld are treated as advance payments of income tax due. They are refundable to the extent they exceed tax as determined on tax returns. PAYE may include withholding the employee portion of insurance contributions or similar social benefit taxes. In most countries, they are determined by employers but subject to government review. PAYE is deducted from each paycheck by the employer and must be remitted promptly to the government. Most countries refer to income tax withholding by other terms, including pay-as-you-go tax.
Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their employees. By law, some payroll taxes are the responsibility of the employee and others fall on the employer, but almost all economists agree that the true economic incidence of a payroll tax is unaffected by this distinction, and falls largely or entirely on workers in the form of lower wages. Because payroll taxes fall exclusively on wages and not on returns to financial or physical investments, payroll taxes may contribute to underinvestment in human capital, such as higher education.
A registered retirement savings plan (RRSP), or retirement savings plan (RSP), is a type of financial account in Canada for holding savings and investment assets. RRSPs have various tax advantages compared to investing outside of tax-preferred accounts. They were introduced in 1957 to promote savings for retirement by employees and self-employed people.
Universal life insurance is a type of cash value life insurance, sold primarily in the United States. Under the terms of the policy, the excess of premium payments above the current cost of insurance is credited to the cash value of the policy, which is credited each month with interest. The policy is debited each month by a cost of insurance (COI) charge as well as any other policy charges and fees drawn from the cash value, even if no premium payment is made that month. Interest credited to the account is determined by the insurer but has a contractual minimum rate. When an earnings rate is pegged to a financial index such as a stock, bond or other interest rate index, the policy is an "Indexed universal life" contract. Such policies offer the advantage of guaranteed level premiums throughout the insured's lifetime at a substantially lower premium cost than an equivalent whole life policy at first. The cost of insurance always increases, as is found on the cost index table. That not only allows for easy comparison of costs between carriers but also works well in irrevocable life insurance trusts (ILITs) since cash is of no consequence.
In the United States income tax system, adjusted gross income (AGI) is an individual's total gross income minus specific deductions. It is used to calculate taxable income, which is AGI minus allowances for personal exemptions and itemized deductions. For most individual tax purposes, AGI is more relevant than gross income.
Tax withholding, also known as tax retention, pay-as-you-earn tax or tax deduction at source, is income tax paid to the government by the payer of the income rather than by the recipient of the income. The tax is thus withheld or deducted from the income due to the recipient. In most jurisdictions, tax withholding applies to employment income. Many jurisdictions also require withholding taxes on payments of interest or dividends. In most jurisdictions, there are additional tax withholding obligations if the recipient of the income is resident in a different jurisdiction, and in those circumstances withholding tax sometimes applies to royalties, rent or even the sale of real estate. Governments use tax withholding as a means to combat tax evasion, and sometimes impose additional tax withholding requirements if the recipient has been delinquent in filing tax returns, or in industries where tax evasion is perceived to be common.
In France, taxation is determined by the yearly budget vote by the French Parliament, which determines which kinds of taxes can be levied and which rates can be applied.
For households and individuals, gross income is the sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings, before any deductions or taxes. It is opposed to net income, defined as the gross income minus taxes and other deductions.
Superannuation in Australia, or "super", is a savings system for workplace pensions in retirement. It involves money earned by an employee being placed into an investment fund to be made legally available to members upon retirement. Employers make compulsory payments to these funds at a proportion of their employee's wages. From July 2024, the mandatory minimum "guarantee" contribution is 11.5%, rising to 12% from 2025. The superannuation guarantee was introduced by the Hawke government to promote self-funded retirement savings, reducing reliance on a publicly funded pension system. Legislation to support the introduction of the superannuation guarantee was passed by the Keating Government in 1992.
Taxation in the Netherlands is defined by the income tax, the wage withholding tax, the value added tax and the corporate tax.
Superannuation in Australia is taxed by the Australian taxation system at three points: on contributions received by a superannuation fund, on investment income earned by the fund, and on benefits paid by the fund.
The fringe benefits tax (FBT) is a tax applied within the Australian tax system by the Australian Taxation Office. The tax is levied on most non-cash benefits that an employer provides "in respect of employment." The tax is levied on the employer, not the employee, and will be levied irrespective of whether the benefit is provided directly to the employee or to an associate of the employee.
This is a list of the maximum potential tax rates around Europe for certain income brackets. It is focused on three types of taxes: corporate, individual, and value added taxes (VAT). It is not intended to represent the true tax burden to either the corporation or the individual in the listed country.
Since 2008 the Dutch Tax Administration can designate an institution to be a "Public Benefit Organisation". At least 90% of the efforts of an ANBI has to be focused on the general good. In addition, from 2012 until at least 2018, the culturele ANBI would have profit from even more Dutch tax advantages.
A Personal Retirement Savings Account (PRSA) is a type of savings account introduced to the Irish market in 2003. In an attempt to increase pension coverage, the Pensions Board introduced a retirement savings account, that would entice the lower paid and self-employed to start making some pension provision. The intention was for PRSAs to supplement any State Retirement Benefits that would be payable in years to come.
Taxation in Finland is mainly carried out through the Finnish Tax Administration, an agency of the Ministry of Finance. Finnish Customs, the Finnish Transport and Communications Agency Traficom, and pension funds also collect taxes. Taxes collected are distributed to the Government, municipalities, church, and the Social Insurance Institution, Kela.
Taxes in Germany are levied at various government levels: the federal government, the 16 states (Länder), and numerous municipalities (Städte/Gemeinden). The structured tax system has evolved significantly, since the reunification of Germany in 1990 and the integration within the European Union, which has influenced tax policies. Today, income tax and Value-Added Tax (VAT) are the primary sources of tax revenue. These taxes reflect Germany's commitment to a balanced approach between direct and indirect taxation, essential for funding extensive social welfare programs and public infrastructure. The modern German tax system accentuate on fairness and efficiency, adapting to global economic trends and domestic fiscal needs.
Taxation may involve payments to a minimum of two different levels of government: central government through SARS or to local government. Prior to 2001 the South African tax system was "source-based", where in income is taxed in the country where it originates. Since January 2001, the tax system was changed to "residence-based" wherein taxpayers residing in South Africa are taxed on their income irrespective of its source. Non residents are only subject to domestic taxes.
Taxation in Belgium consists of taxes that are collected on both state and local level. The most important taxes are collected on federal level, these taxes include an income tax, social security, corporate taxes and value added tax. At the local level, property taxes as well as communal taxes are collected. Tax revenue stood at 48% of GDP in 2012.
This article is intended to give an overview of pensions in the Netherlands.
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