Nonresident individuals are liable to pay tax on income from sources in the Netherlands.

Married couples are taxed separately for their earned income in past or present employment, while income from other sources may be freely attributed to one spouse. Spouses living permanently apart are taxed separately on all income. The income of children is taxed in the hands of the parent who maintains the children.

Personal Income Tax (The 'Box' System)

Under the Dutch tax system, there are three categories or boxes of taxable incomes, each with its own tax rate:

Box 1: Taxable Income from Work and Home Ownership

Taxable income under Box 1 includes:

1. Past and present employment
2. Business activities
3. Other activities (cannot be considered employment or business)
4. Periodical payments and pensions from individuals (e.g., alimony) or insurance institutions
5. Periodical payments received from the state and other public institutions (e.g., old-age pension)
6. Owner-occupied dwellings

Income from all these sources is aggregated before deductions and tax credits are applied. Income is then taxed at progressive rates.

Income Tax Rates 2024

Box 2: Taxable Income from a Substantial Shareholding

Taxable income under Box 2 includes dividends and capital gains from a substantial shareholding. Income until €67,000 in this category is taxed at a rate of 24.50% and everything above €67,000 is taxed at 31.00%.

Box 3: Taxable Income from Savings and Investments (Including Real Estate)

Taxable income under Box 3 includes income from savings and investments. A flat tax of 36% is levied on the deemed yield of the net assets.

The applicable deemed yield depends on the value of the assets.

Rental Income Tax

If a property is rented out, the taxation will take place in Box 3 at a flat rate of 36% based on the assumption that a deemed rental yield is made on the net assets. The applicable deemed rental yield depends on the value of the assets.

Deemed Yield of Assets for Taxation 2024

Capital Gains Tax

No capital gains tax is levied on the profits realized on the sale of Dutch real estate owned by a nonresident individual unless the nonresident individual is engaged in a trade or business in the Netherlands and the real estate is one of the capital assets of the business.

If the sale of real estate is part of a business enterprise, capital gains are taxed as part of income in Box 3 at a flat rate of 32% on the deemed yield of the asset.

Corporate Taxation

Income Tax

Income and capital gains earned by companies are subject to corporate income tax. Income-generating expenses are deductible when calculating taxable income.

Buying and Selling Taxes/Costs

Property Holding Tax

Real Estate Tax (Onroerendezaakbelasting)

Real estate taxes are based on the value of the property and are paid by both the owner and the user. Each municipality is entitled to determine its own tariffs for real estate taxes which are applicable for four years. The tariffs (owner and user tariff) for the real estate taxes are typically between 0.1% and 0.3% of the property value.

Other Taxes

Besides real estate taxes, municipal authorities levy other taxes and charges such as building charges that are related to building permits. Such charges can be very high, so a critical review is advised before payments are to be made.

Other possible taxes include polder board taxes, land-draining rights, wastewater pollution tax, sewage system tax, sufferance tax, refuse matter tax, groundwater tax, ecological taxes, and the energy tax. These taxes and their rates vary from municipality to municipality, so consultation with a makelaar or notaris is necessary.