The Dutch tax system

Wage tax is withheld on a monthly basis by your employer and paid by the employer to the Dutch Tax Authorities. Wage tax is considered to be a pre-tax on the ultimate income tax due via your Dutch income tax return. Wage tax includes both taxes and social security contributions.

If you live in (or receive income from) the Netherlands, you are subject to income tax in the Netherlands. The Tax and Customs Administration (Belastingdienst) collects income tax.

Income tax is divided into three categories, known as boxes. 

• Box 1 is income from profits, employment, and home ownership.
• Box 2 is income from substantial shareholding.
• Box 3 is taxable income from savings and investments.

The income in each of the three boxes is taxed at different rates. For box 1 there are progressive tax brackets with different rates. The total of the three boxes is the income tax payable via the annual Dutch tax return. Check belastingdienst.nl for the applicable tax brackets and tax rates per box for each year. 

The Dutch tax year runs from January 1 to December 31. 

The deadline for filing taxes is 1 May for the previous year (so your 2025 tax return needs to be submitted before 1 May 2026). However, it is possible to request an extension from the Tax Administration (Belastingdienst).

Your employer will provide you with your annual salary statement (jaaropgaaf) in February of each year. This document is important when filing taxes with the Dutch Tax Authorities. 

If you live in the Netherlands, you must report your total worldwide income in the Netherlands. There are measures in place to avoid double taxation if you file a tax return in more than one country. See the belastingdienst website for more information.

You must file a tax return in the Netherlands if you:

• Have received an aangiftebrief (invitation) from the Dutch Tax Authorities. You usually receive the form by post or online.
• Have other sources of income besides your employer (for example other salaries, savings, investments, and/or freelance work)

Tax returns can be submitted digitally, but you will need a DigiD to do so. All tax forms are in Dutch and tax matters can be complicated, especially for internationals. If you need help with your tax forms, you can contact the Belastingdienst or enlist the help of a taxation specialist.  

M form

Expats have to fill in the M form for the first year that they live and work in the Netherlands (and possibly also if they leave the Netherlands). This is because they will not have been resident for a full tax year and may therefore be entitled to a refund on wage tax.  

C Form

Non-resident taxpayers (persons with their main place of residency outside the Netherlands) are required to complete the so-called C Form.

General tax credit (algemene heffingskorting)

All employees are entitled to the general tax credit. The amount of credit depends on your income, your age and whether you have lived in the Netherlands the entire year. For more information, see general tax credit (in Dutch)

Details of vehicle purchase tax and road tax can be found on our cars and driving page.

• The Dutch standard VAT rate is 21% and this applies to most goods and services. This rate is average in comparison to the rate in other EU member states.
• A 9% tax rate applies to some items, such as food and beverages (excluding alcoholic beverages), water, pharmaceutical products and medical aids for persons and animals, books and magazines, passenger transport, hotel accommodation, cinemas, and zoos.
• A 0% rate applies to exports and intra-community (EU) supplies.