Income tax system in the Netherlands

Published: 31-03-2010

Income tax system in the Netherlands

In the Netherlands the income tax year is equal to the Calendar year. It runs from 1 January trough 31 december. The date of filing is 1 April of the following year. (f.i. the filing date for the 2010 income tax year is 1 April 2011).

In the Netherlands 3 types of income which are taxed, they are named boxes. The boxes are:  
Box 1 Income from employment and home ownership
Box 2 Income from a substantial interest in a company
Box 3 Income from savings and investments

Each box has its own tax rate. The tax rate for box 1 is a progressive rate up to 52%, The rate of Box 2 is 25% and the rate of box three 1.2%.

The income which is taxed depends on your tax status. There are 3 types of tax status in the Netherlands.
1. Resident taxpayer;
A resident tax payer is taxed in the Netherlands on world wide income. World wide income is all the income which you receive from employment/own business, substantial interest and the savings and investments;

2. Non-resident taxpayer;
A non-resident taxpayer is only taxed on income which can be allocated to the Netherlands. F.i. income from Dutch employment or Dutch real estate. 

3. Partial non-resident taxpayer;
A partial non-resident taxpayer is special tax status is only applicable if the 30%-ruling is granted. A partial non-resident taxpayer is taxed on world wide income from employment in the Netherlands and is taxed on income form savings which can be allocated to the Netherlands.

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