Starting or running a business?

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Taxes

Which taxes does an entrepreneur have to pay? How much?

Any business-owner in the Netherlands is obliged to register its business with the Belastingdienst (tax authority/tax administration). When setting up a ‘eenmanszaak’ or any form of partnership, the registration with the tax authority can be combined with the KvK registration.

It is important to register with the ‘Belastingdienst’ as soon as possible since it is possible to claim VAT refunds on the investments that were required to start the business.

The taxes commonly applicable for entrepreneurs are (not exhaustive! Find a more exhaustive list here (Dutch)). To get an overview of which taxes apply to which business form, see here (Dutch).

Corporation Tax/CIT (Vennootschapsbelasting) – 20% to 25%

Also known as a business tax, is a tax imposed on businesses incorporated in The Netherlands and which derive income from within The Netherlands. The CIT rate in The Netherlands is for taxable amounts up to and including EUR 200,000. For taxable amounts which exceed EUR 200,000, the Dutch corporate income tax rate is .

Value Added Tax/VAT (BTW) – 21%

VAT is an indirect tax on the consumption of goods and services. A person that is registered for VAT is called vendor. VAT must be included in the selling price of every taxable supply of goods or services made by a vendor. The current standard VAT rate in The Netherlands is .

  • There is a lower rate for food, drinks, medicines, books, and public transport (6%)
  • Certain products and services are exempt from VAT altogether (e.g. Educational courses/trainings, services rendered by journalists, composers, authors, medical services, etc. See list here (Dutch)
  • Zero rated VAT may be applicable to international trade inside the EU – the application of VAT is shifted to the country of the client. See more info on exemptions hereThe VAT you charge to your client must be returned to the Tax Administration. The VAT which your suppliers charge can be offset against this. If you do not charge VAT, you cannot offset VAT. You should check with the Tax Administration if you are not sure whether you should charge VAT or not.
  • A self-employed entrepreneur/freelancers who has not large sums of VAT in its administration, can apply for a special tax facility called ’kleine ondernemersregeling’ (small-sized entrepreneurs regulation). In that case you will have to pay less VAT or no VAT. This regelation is only applicable for those who have a non-limited company (Eenmanszaak / CV / VOF). Besides, the VAT to be returned after reclaiming input VAT, is less than € 1,883 a year. Find the conditions here (Dutch). In order to apply for this special tax facility, you need to file a request to the Dutch tax authorities.

Any entrepreneur in the Netherlands needs to pay VAT. The legal form of your business is irrelevant regarding the payment of VAT. A foundation or association will also have to pay VAT if the Tax and Customs Administration regards it as an enterprise. Even if you are exempt from VAT you may still have to file VAT return in some cases. Please be advised by the Dutch Tax and Customs Administration. The VAT you have collected from your customers must be forwarded to the Tax and Customs Administration. The VAT you have paid to your suppliers can be deducted from the VAT you have collected. So you pay VAT over the difference between your purchase price (including cost) and selling price. The VAT must be calculated for all payments and all additional costs. This also includes dispatch costs, travel expenses, telephone costs, packaging costs (except deposit money) and suchlike.

Payroll Tax

If you have employees in your enterprise, you, as the employer, will have to deduct payroll tax at the source and pay this to the Tax Administration. The payroll taxes are composed of the following elements:

income tax, national insurance contributions, employed persons’ insurance scheme contribution and income-dependent Care Insurance Act contribution.

Income Tax

If your business pays you an income or dividend, you are require to pay income tax. The Netherlands has a (partly) progressive income tax system. Including Social Security payments, the rates amount to 33.5%, 42%, and 52%.

Property Tax

The rate of the tax (“ozb-tarief”) is determined by the municipality. The rate is applied to the value of the property (the “WOZ” value) and claimed by the municipality.

How do I pay for my tax?

Please click here to access the page of the ‘Belastingdienst’ which provides information on how to pay taxes in the Netherlands

(Cororate) Income tax (inkomsten- en vennootschapsbelasting)

You can submit your Corporate Income Tax in three ways:

  1. Through the website of the Belastingdienst;
  2. With declaration software (many packages available online);
  3. Through a fiscal intermediary. For starting entrepreneurs, the first option is most common, since it is free of charge.

Value Added Tax (VAT)

VAT is paid either on a monthly or on a quarterly basis, depending on the type of business you have and the level of turnover. Entrepreneurs do their VAT declarations and payments online, by logging into the Belastingdienst website

For more details on VAT, please click here

Payroll Tax

The Employer has to deduct payroll tax at the source and pay this to the Tax Administration

For more details, please click here

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