Tax law and fiscal law

Created16 juni 2025

Updated16 juni 2025

bySabine Imdahl

Understanding tax obligations is essential for anyone living, working or doing business in the Netherlands. Whether you are an employee, a freelancer or a business owner, Dutch tax law and fiscal law (belastingrecht or fiscaal recht) affect your rights, responsibilities and financial planning.

This article explains the basics of the Dutch tax system, including why taxes exist, what they fund, and how different rules apply to individuals, expats and businesses.

What is tax law – and why do we pay taxes?

Tax law refers to the legal rules that determine how taxes are imposed, calculated, collected and enforced. In the Netherlands, this body of law is commonly called belastingrecht or fiscaal recht.

While the terms tax law and fiscal law are often used interchangeably, there is a small difference in emphasis:

Tax law focuses on specific taxes like income tax, VAT and corporate tax.

Fiscal law can be used more broadly to include areas like public budgets and government finance.

In Dutch practice, both terms generally refer to the same legal area, and most legal professionals use belastingrecht for both.

Taxes are collected to fund public services and infrastructure such as education, health care, roads, social security and emergency services. Paying taxes is not only a legal obligation, but also a way of contributing to society and ensuring essential systems keep running.

Main sources of Dutch tax and fiscal law

The key laws include:

General Tax Act (Algemene wet inzake rijksbelastingen – AWR) [1]

Income Tax Act 2001 (Wet inkomstenbelasting 2001) [2]

Corporate Income Tax Act 1969 (Wet op de vennootschapsbelasting 1969) [3]

Value Added Tax Act 1968 (Wet op de omzetbelasting 1968) [4]

These laws apply to individuals, businesses and organisations, and they are enforced by the Dutch Tax and Customs Administration (Belastingdienst).

Income tax for individuals

If you live or work in the Netherlands, you are likely considered a resident taxpayer. This means you are taxed on your worldwide income (wereldinkomen), including income from abroad. Non-resident taxpayers are usually only taxed on income from Dutch sources, such as work carried out in the Netherlands or Dutch property.

To prevent you from paying tax on the same income in more than one country, the Netherlands has entered into double taxation treaties (belastingverdragen) with many countries [5]. These treaties set out which country has the right to tax which type of income. You may be eligible for a tax exemption or a reduction (aftrek voorkoming dubbele belasting) in the Netherlands for income that is taxed abroad.

If there is no tax treaty, the Decree on the Avoidance of Double Taxation 2001 (Besluit voorkoming dubbele belasting 2001) [6] applies. This ensures that you do not pay tax twice on the same income, even in countries without a formal agreement.

In special cases – for example, if you are taxed twice despite a treaty – you can request a mutual agreement procedure (onderlinge overlegprocedure) [7] under the applicable treaty or ruling. This allows the Dutch and foreign tax authorities to work out a solution.

For residents with foreign income or assets, you must report everything in your annual Dutch tax return. The applicable treaty or ruling then determines how your Dutch tax bill is adjusted to avoid double taxation.

Dutch income tax is structured into three boxes:

Box 1: Income from work and home ownership (e.g. salary, freelance earnings, mortgage benefits)

Box 2: Income from substantial shareholdings (5% or more in a company)

Box 3: Income from savings and investments

Each box has its own tax rules and rates. The system is progressive, meaning higher incomes are taxed at higher rates. Rates and thresholds are reviewed annually.

The 30% ruling for expats

Highly skilled migrants recruited from abroad may qualify for the 30% ruling (30%-regeling) – a Dutch tax exemption that compensates for the extra costs of relocating to the Netherlands.

If approved, this ruling allows 30% of gross salary to be paid tax-free for a limited period. The remaining 70% is taxed under the normal income tax rules.

To qualify, you must:

Be hired from outside the Netherlands

Possess specific expertise that is scarce in the Dutch labour market

Meet government-set salary thresholds

Apply jointly with your employer within four months of starting work

The ruling also allows partial non-resident tax status, meaning you may be exempt from taxation in Box 2 and Box 3 (such as foreign investments or shares).

Since 1 January 2024, the 30% benefit is phased out gradually [8]:

30% for the first 20 months

20% for the next 20 months

10% for the final 20 months

(Only if you continue to meet the salary requirements throughout the full period.)

Business and self-employment taxes

If you run a business or work as a freelancer (zelfstandige), you must register with the Chamber of Commerce (Kamer van Koophandel) [9] and file regular tax returns.

Your fiscal obligations may include:

Income tax (if you’re a sole trader or in a partnership)

Corporate income tax (if you operate through a private limited company – besloten vennootschap or BV)

VAT (omzetbelasting) on your sales or services

Payroll tax (loonheffing) if you employ staff

You may also benefit from tax deductions and credits, such as the entrepreneur’s deduction (ondernemersaftrek) and the small business scheme (kleineondernemersregeling – KOR), depending on your circumstances.

Corporate tax and international business

Companies based in the Netherlands, or those with a permanent Dutch presence, are generally subject to corporate income tax.

The corporate tax system is structured with:

A lower rate for profits up to a certain amount

A higher rate for profits above that threshold

The Netherlands has a large number of tax treaties to avoid double taxation and follows international guidelines (OECD, EU) on transparency and fair taxation. If you run a multinational company, you may also need to comply with rules on:

Transfer pricing

Substance requirements

Controlled foreign companies (CFC)

VAT (value added tax)

Most businesses in the Netherlands must charge value added tax (VAT) on their goods or services. VAT (omzetbelasting or BTW) is currently applied at:

21% standard rate

9% reduced rate (for essential goods and services like groceries or books)

0% rate (for certain international transactions)

Some services – such as education and healthcare – are exempt from VAT.

If you’re a business, you must register for VAT, include it on your invoices, and file VAT returns monthly or quarterly. If you trade within the EU, intra-community VAT rules apply.

Tax returns and deadlines

Individuals must usually file their income tax return each year by 1 May via the online portal of the Dutch Tax Authorities called “Mijn Belastingdienst” portal. Extensions can be requested.

Businesses must file tax returns for:

Payroll tax

Corporate tax (within five months of the end of the financial year)

They too can log in via a different portal on the website of the Dutch Tax Authorities.

Late submissions may result in penalties or interest charges. If you disagree with a tax decision, you can file an objection (bezwaar) or, if necessary, appeal in court.

Inspections and disputes

The Dutch Tax Authority (Belastingdienst) has the authority to audit individuals and businesses. You must keep financial records for seven years, or ten years for certain assets like property.

If you disagree with a tax assessment or decision, you can challenge it. The process usually follows these steps:

Objection (bezwaar) – a written objection to the tax authority explaining why you disagree

Appeal (beroep) – if the objection is rejected, you can appeal to the court

Further appeal – in some cases, you can take the case to the Court of Appeal, and possibly to the Supreme Court (Hoge Raad) if legal interpretation is in question

Some cases may be resolved through settlements or advance rulings.

Conclusion

Tax law and fiscal law in the Netherlands are detailed and dynamic, but also clearly regulated. Whether you’re a private individual, an expat, a freelancer or a company director, it’s important to understand your obligations – and your rights.

Taxes fund the systems we all rely on: healthcare, education, roads, and public safety. When handled properly, Dutch tax law provides not only structure, but also benefits – from expat rulings to deductions for entrepreneurs.

If you’re unsure about your situation, or dealing with cross-border income or international business, legal and tax advice can help you make informed decisions and stay compliant.

Find legal professionals specializing in tax law and fiscal law

Disclaimer: The information provided on this website is for general informational purposes only and is not legally binding. Although we strive for accuracy, the content may contain errors. If you notice any mistakes, please let us know by contacting us via the contact form located at the bottom of the page.

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