The Dutch government obtains its revenue mostly by taxation. The Financial Ministry implements the national legislation on taxes and the Belastingdienst deals with its actual execution. You must pay taxes if you generate income while staying in Holland.
A brief history of taxation in Holland
Dutch people started paying taxes centuries ago. In the 1800’s the government guaranteed its income through taxation of indispensable goods like soap, firewood, salt, meat, grain, wine, coal, wool and peat. Back then all people were taxed equally regardless of their actual earnings.
In 1806 the Financial Minister at the time, Alexander Gogel introduced a general system for taxation. Income tax, or “inkomstenbelasting”, was adopted only in 1914. Its purpose is to tax everyone proportionally to their respective income, following the principle: “The more you earn, the more you pay.”
Twenty years later, in 1934, a tax on sales (omzetbelasting) was introduced. In 1968 it was substituted by the value-added tax on sales. In 1964 the government adopted the payroll tax, or “loonbelasting”.
The Belastingdienst (Dutch tax office)
The Dutch office for collection of taxes and customs is called Belastingdienst and it is within the structure of the Financial Ministry. Its responsibilities include:
- goods export, import and transit;
- fraud detection (economic, fiscal and financial);
- levying and collection of taxes;
- payment of income-related benefits for health care, rent and childcare.
The tax system in Holland
What common types of taxes will you encounter while working and living in Holland? Is it compulsory for you to submit a yearly return for income tax? This article will give you the necessary information about the tax system in the country.
Dutch tax advisors
It is not easy to calculate your taxes. This even applies to the majority of Dutch citizens and the tax requirements can be especially confusing for internationals. The revenue service acknowledges these difficulties in its own slogan: “There is no way to make it enjoyable, but with us, it’s easier.”
In case you need assistance with calculating your taxes and submitting the necessary documents, please, feel free to contact our advisors. They will be happy to help you out.
The 30% reimbursement ruling
Migrants with high professional qualifications who work in Holland might be eligible for 30% tax advantage. Check whether you meet the criteria for reimbursement ruling in this article.