TCA Income Tax Brackets in the Netherlands for 2024

Ranking sixth in the Digital Readiness Index 2019, The Netherlands is Europe’s most wired country with huge investments in innovation and technology. An optimal location for venture capital today, the Netherlands provides robust fiscal policies that make it an attractive base for international operations for many companies. The tax system in the Netherlands is administered by the official tax body, the Tax and Customs Administration (Belastingdienst). 

Key features of its taxation system include:

• a wide network of close to 100 bilateral tax treaties to avoid double taxation
• a broad participation exemption (100% exemption for qualifying dividends and capital gains)
• an efficient fiscal unity regime
• no withholding tax for outgoing interest and royalty payments in most cases
• a special tax regime for expats, known as 30% Facility
• value-added tax (VAT) deferment on importation: no actual payment of VAT

The General Act Pertaining to National Taxes provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with Dutch tax laws. Download the Netherlands Foreign Investment Agency (NFIA)’s Taxes and Incentives 2024 Guide.

Here you will learn more about:

• headline tax rates
• personal income tax (PIT) rates
• corporate income tax (CIT) rates
• capital gains tax (CGT) rates
• withholding tax rates for residents and non-residents
• value-added tax (VAT) rates

Headline Tax Rates in the Netherlands

Personal Income Tax (PIT) Rates for Individuals in the Netherlands for 2024

In Netherlands, you must pay tax on your income which is divided into three categories (also known as boxes): 

• Box 1: tax on income from work and home ownership

This may include salary, business profits, pension, maintenance payments, income from abroad, and income earned as a freelancer. This income is taxed at a progressive rate

• Box 2: tax on substantial interests
• This is tax on financial interests you may have in a company. For example, you may own at least 5% shares, options or profit-sharing certificates in a company
• Box 3: savings and investments
• You pay tax on income from your wealth which is calculated as the value of all assets less any debts. However, part of your wealth is not taxable, that is, the capital yield tax allowance

While a second job means a second income and the need to pay more payroll tax (second job tax), the reality is that you pay tax based on your total annual income and not on the number of jobs you have. In principle, you may be taxed more heavily during the year if you have a second job but any overpaid tax is refunded when you file your tax return.

Personal Income Tax (PIT) Rates for Box 1 Income

PIT rates for Box 1 income are tabulated below.

Personal Income Tax (PIT) Rates for Box 2 Income

PIT rates for Box 2 income are tabulated below.

Personal Income Tax (PIT) Rates for Box 3 Income

Box 3 income is calculated according to new legislation (Wet Rechtsherstel Box 3 and the Overbruggingswetgeving). There are three rates used for the calculations: 

• one rate for your bank balances at 1.03% (percentages are provisional)
• another rate for investments and assets at 6.04% (percentages are fixed)
• a third rate for your debts at 2.47% (percentages are provisional)

Review the complete list of assets and debts you must declare.

However, on 6 June 2024, the Supreme Court of the Netherlands (Hoge Raad) ruled that the Restoration Act for Box 3 (“Wet Rechtsherstel Box 3”) and the Box 3 Bridging Act (“Overbruggingswetgeving”) violate the European Convention on Human Rights. As a result of the rulings, box 3 income in the provisional assessment for 2024 is calculated according to the new legislation (Wet Rechtsherstel Box 3) which means that the Tax and Customs Administration uses the actual distribution of individual assets.

The Tax and Customs Administration provides guidance on how to calculate box 3 income for 2024 in 6 steps:

1. Calculate the taxable return
2. Calculate your capital yield tax base
3. Calculate your basis for savings and investments
4. Calculate your share in the capital yield tax base
5. Calculate your income from savings and investments
6. Calculate how much tax you must pay in box 3

Personal Income Tax Due Dates

Corporate Income Tax (CIT) Rates in the Netherlands for 2024

The Corporate Income Tax (CIT) rates in the Netherlands are tabulated below.

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in the Netherlands

Below is an overview of the application of Capital Gains Tax (CGT) for corporations and individuals in the Netherlands. 

Withholding Tax Rates for Residents and Non-Residents in the Netherlands

In general, dividend distribution by Dutch resident companies is subject to 15% Dutch dividend tax. However, a withholding tax exemption applies if the dividend is distributed by a qualifying corporate share in a country with which the Netherlands has concluded a tax treaty that contains a dividend article.

In general, there is no Dutch withholding tax (WHT) on interest and royalties. WHT is only due in case of distributions to affiliated beneficiaries in countries with very low taxes, countries on the EU list of non-cooperative jurisdictions, and in certain tax abuse situations. There is a conditional WHT on dividends, interest and royalty payments based on the provisions of the Conditional Source Taxation Act. 

The Netherlands is signatory to several double taxation treaties (DTTs) which may vary WHT rates. A taxpayer may benefit from the provisions of these agreements.

Value-Added Tax Rates in the Netherlands

The Value-Added Tax (VAT) rates in the Netherlands are tabulated below with application examples.