Netherlands Taxes





Netherlands Tax Rates 2021

Last partial update, October 2021.

Income taxes in the Netherlands

In the Netherlands there are basically two income taxes:

(i) Corporate tax; and
(ii) Personal income tax.

Companies are subject to Dutch corporate tax and individuals are subject to Dutch personal income tax.

Netherlands Corporate Tax


Rate

The 2021 Dutch corporate tax rate is 15% for annual income of up to EUR 245,000 and 25% for income exceeding this ceiling.

Netherlands Taxable profits

The worldwide profits of a Dutch company are subject to Dutch corporate tax. However, certain items of income (such as income from qualifying subsidiaries) are exempt from tax.

Participation exemption

Capital gains and dividends derived from a qualifying subsidiary are fully exempt from Dutch corporate tax on the basis of the Dutch participation exemption. A subsidiary in general qualifies for the Dutch participation exemption when (i) the subsidiary is an active company and (ii) the Dutch parent company holds an interest of at least 5% in the subsidiary.



Tax group in Netherlands

A tax group ("fiscal unity") can be formed in the Netherlands when (i) a Dutch company holds 95% or more of the shares in another Dutch company, and (ii) the financial years of the companies are the same.

Losses carry forward and back

For Dutch corporate tax purposes, tax losses can be carried back to profits of the first preceding year and carried forward to profits of the following six years.

Depreciation

Both methods , the straight line and the reduced line depreciation are in use.
For investments in environment improving assets 75% is allowed for depreciation.
Goodwill can be 10% deducted per year.

Tax return

Corporate tax returns need to be filed in the Netherlands within 5 months after the end of a financial year (an extension can be requested).

Tax payment

Dutch corporate tax is paid during the financial year on the basis of an estimate. After the financial year, the exact final tax due is determined on the basis of the corporate tax return.



Dutch Personal Income Tax

Rate

The 2021 Dutch personal income tax rate is max. 49.5%.
In general personal income tax in the Netherlands is classified by 3 categories, or "boxes".
Box 1 relates mainly to employment and business income.
Box 2 relates to income from a limited liability company with shareholding of 5% or more in the company.
Box 3 relates to income from savings and investments.

Netherlands Personal Tax Rates 2021 (box 1):


Income (EUR) Tax Rate
1-68,507 37.1
Over 68,507 49.5


Note: The rates in the table do not include national insurance.



Tax Rates for Box 2 and Box 3

Income classified in box 2 is taxed at a flat rate of 26.9%.
Income classified in box 3 is taxed at a flat 31% rate.

Taxable income

The income an individual receives is subject to Dutch personal income tax.
Any Dutch payroll tax already withheld on the income will reduce the amount of Dutch personal income tax payable.

Tax reductions

There are a number of tax reductions available. For example there is a tax reduction available when you live and work in the Netherlands or when you are conducting a study/training.

Tax return

Dutch personal income tax returns need to be filed in the Netherlands within 3 months after a calendar year (an extension can be requested).

Tax payment

Dutch personal income tax is paid during the calendar year on the basis of an estimate. After the calendar year, the exact final tax due is determined on the basis of the personal income tax return.

Social Security

In the Netherlands both employers and employees contribute to social security.
Employers –Pay about 18% to social security, unemployment, disability and child care
- The payment is subject to a ceiling of EUR 58,311.

Employees – Pay 27.6% covering old age social security, surviving dependent and long term care.
- The payment is subject to a ceiling of EUR 35,129 .

Tax Withholding Rates

The Dutch tax withholding rates for payments to nonresident companies are as follows:
Dividends-0%/ 15%
Interest- 0%/25%
Royalties- 0%/25%
Technical Services-0%
Branch Remittance Tax-0%
Note: the withholding rates are subject to double tax treaties when relevant.

(Previous 2009 update by Balthazar Netherlands Tax Consultants, www.netherlandstax.com)



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