Here’s Your Guide to Taxes and Finances in the Netherlands.

If you are considering living and working in the Netherlands, you would need to grasp taxes and finances in the Netherlands. In this article we explore these ideas a bit more.

Taxes in the Netherlands

Professionals in the Netherlands need to know the tax system. By having the proper knowledge you can follow the tax laws. Like most countries the Netherlands has different types of taxes. The main tax types are income tax, corporate tax and value added tax (VAT).

Similar to international standards your income determines how much tax you pay.  As expected, any salary you are earning will be taxed. The tax rate on your income can range from 9.45 to 49.5% depending on the amount you earn and what benefits your package includes. There is also the 30% tax rule for expats. This 30% reimbursement ruling presents an advantage for expats to consider. By taking advantage of this tax benefit, they can significantly increase their take-home income. This will also help with financial stability and savings for the South African graduates looking at working in the Netherlands.

Value added tax or (VAT) is tax you pay for goods or services. Business owners need to apply for VAT and add to their sales. The rate of Value added tax or VAT in the Netherlands is 21%. If you have a business in the Netherlands you need to pay corporate tax . This is a rate of 25%.

The Dutch Tax system

The Dutch tax system is not very simple. However, understanding how it works is important. The Dutch tax system has many aspects. The main one is the box system. The box system is used to separate the types of taxes. The Dutch tax system has three boxes. Income from home and work, Income from substantial interest and income from investments and saving.

All these incomes have a tax rate. The Dutch tax system can also help you bring down your taxes. This is because they have credits and deductions to use. This is good for self employment. This means you can deduct expenses from your taxable income.

Keeping up with your Finances in the Netherlands

Keeping track of your finances can be hard. No need to worry though, there are steps to ensure you’re using your money wisely. These are budgeting, saving and working with a financial adviser. 

Budgeting really helps with overspending. By writing down your income or expenses, you can learn how to spend less. Saving money for the future is always wise. Understanding the Dutch tax system is important. If you can’t, then speak to a financial adviser who can help. They will assist with a financial plan.

The decision to move to another country and work there can be very complex to navigate, but holds promise. Contact us today to get started on your journey navigating this complex but exciting life decision!