Tax rates in the Netherlands

Company Tax

Tax Rate For Foreign Companies

Dutch companies are taxed on their worldwide income; however, certain types of income are eligible for tax exemption or can be excluded from the tax base. Non-resident companies are only taxed on their Dutch-sourced income. There are no special tax rates for foreign companies.

Capital Gains Taxation

Capital gains are generally included in taxable profits and taxed at the corporate rate. A participation exemption is provided for qualifying dividends and capital gains from the sale of shares in a company. The firm investing in a subsidiary must meet the following requirements: (a) maintain a minimum 5% ownership of the subsidiary; (b) the subsidiary is not held as a portfolio investment or the subsidiary is subject to a reasonable corporate tax rate in its country of residence; or (c) the share of "dormant" assets (such as portfolio investment) of the subsidiary does not exceed 50% of the total.

Main Allowable Deductions and Tax Credits

Business expenditure is generally tax-deductible, including costs incurred in setting up a business; reserves kept for certain types of future spending and book profits; rents, royalties and interest payments on corporate debt; remuneration of members of the managing and supervisory boards; bad debts; capital losses; pension plan contributions; commissions; bonuses paid to employees through an internal profit-sharing plan; gifts to contributions to religious, social, charitable and other institutions (up to 50% of taxable income or EUR 100,000, whichever is lower); and many types of taxes, including foreign taxes if not already benefiting from a tax treaty (but not corporate income tax). An additional standard allowance is provided for investment in fixed assets. Certain expenses such as fines are non-deductible.

With regard to goodwill, the amortisation for tax purposes is limited to 10% of the purchase price per annum, and the tax depreciation of other fixed assets (i.e. inventory, equipment) is limited to 20% of the purchase price or production costs each year.
Up to 75% of environmentally friendly investment costs can be deducted from taxable profit.

Capital losses are deductible unless attributable to the disposal of a shareholding qualifying for the participation exemption. In 2021, 2020, and 2019, tax losses could be carried back one year and carried forward six years. However, starting from January 1, 2022, a rule allowing unlimited loss carryforward without any time limit is in effect. However, there are restrictions on deducting carryback and carryforward losses when the taxable profit is more than EUR 1 million. If the profit in a particular year exceeds EUR 1 million, the losses can only be offset up to 50% of the excess taxable profit, excluding the initial EUR 1 million that is always deductible.

Other Corporate Taxes

A real estate transfer tax is levied on the acquisition of property in the Netherlands at a rate of 10.4% (increased from 8% as of 1 January 2023) of the market value of the property.
If an entity primarily possesses real estate and meets specific criteria, it may be classified as a "real estate entity." In such cases, the acquisition of shares in that entity, which owns the real estate, could be subject to transfer tax. The classification as a real estate entity is determined when over 50% of the entity's assets comprise real estate, and at least 30% of those assets consist of immovable property in the Netherlands.

Insurance tax at a rate of 21% is levied on insurance premiums, excluding life, accident, medical, invalidity, disability, unemployment and transport insurance, which are exempt.

Various environmental taxes are levied, including a coal tax, an energy tax on the supply of electricity and natural gas, a tap water tax, a waste tax on the disposal of waste and a motor vehicle tax. Moreover, a national CO₂ levy applies to industrial production and waste incineration.

In the Netherlands, there is a fee known as "cijns" that is levied based on the turnover associated with oil and gas production and exploration. Starting from 2023 until 2024, an elevated cijns rate of 65% is applicable to turnover specifically derived from the sale of natural gas at a price exceeding EUR 0.5 per cubic meter.

From 2022, a unilateral air passenger tax is imposed by airport operators. The rate is EUR 26.43 (2023) for each passenger departing from a Dutch airport (an exemption applies to transfer passengers and children under the age of two).

Municipalities levy an additional annual real estate tax at varying rates, which is deductible for corporate tax purposes.

The total aggregate rate for social security contributions is 27.65%, calculated on the first EUR 37,149 of each employee’s gross salary (2023).

Companies annually bringing 50,000 or more kilograms of packing material on the market must pay a ‘waste management contribution’ (rates vary according to various parameters).

Other Domestic Resources

Belastingdienst - Dutch Tax Administration

Tax Rate

Allowable Deductions and Tax Credits

Deductions are available for (i) (Box 1) homeownership and employment income: charity donations, life annuity premiums and mortgage interest on an owner-occupied home (0.35% of the value of the property is generally taken into account; for properties above EUR 1.2 million, a rate of 2.35% applies to the surplus), childcare, alimony, and medical treatment expenses; (ii) (Box 2) enterprise income from shareholdings of a company: losses; (iii) (Box 3) savings and investment income: each taxpayer is allowed a tax-free capital threshold of EUR 57,000 (2023). Certain assets are exempted from box 3, including assets that are already taxed in box 1 or box 2, movable property for personal use, investments in forests and nature, objects of artistic or scientific nature (when they are not used as an investment), environmentally friendly investments (capped at EUR 60,429/person).

Under the work-related cost scheme, the employer may reimburse expenses tax-free, up to 3% for the first EUR 400,000 of the total fiscal wages and 1.18% for the remaining amount of the taxable wage bill.
Personal deductions include alimonies, charitable contributions, education expenses (from 2022, replaced with the STAP-budget, a contribution of a maximum of EUR 1,000/year to take a course or programme to increase one's employability), medical and disability expenses, life annuity premiums, mortgage interest payments related to the primary residence.

Special Expatriate Tax Regime

Residents are taxed on worldwide gross income while non-residents are taxed only on certain Dutch-sourced income (returns from immovable property located in the Netherlands and profit-sharing rights on net profits of resident companies, employment and business income).

Qualifying non-resident taxpayers who are non-resident individuals can avail themselves of specific deductions and tax benefits that are typically applicable to resident taxpayers. To qualify for this scheme, non-resident taxpayers must meet certain (adjusted) conditions. The key requirements include having 90% or more of their income subject to wage and income tax in the Netherlands and residing in a European Union (EU) member state, Bonaire, Iceland, Liechtenstein, Norway, Saba, Sint Eustatius, or Switzerland. A general provision is also included for cases where a non-resident taxpayer's income is less than 90% subject to Dutch tax, but they are entitled to personal allowances in the Netherlands based on European law. Additionally, non-resident taxpayers must provide a declaration of income from the tax authorities in their country of residence.

Under the provisions of the "30% ruling", employees who are considered resident taxpayers may opt to be treated as partial non-residents for five years, which means they will be treated as residents for box 1 and as non-residents for box 2 and box 3 purposes, while they are entitled to personal deductions and tax credits.