Taxation in Boxes

Find out about the categories of income in the Netherlands...

Information provided by Quintin Eadie, tax advisor at AAme Accountants and Tax Advisors

Tel.: +31(0)15 820 0069 | website | email



There are three categories of income, each with their own tax rates. These categories are referred to as "boxes".

  • Box 1: income from employment and primary residence
  • Box 2: income from substantial share holding
  • Box 3: income from savings and investments

Box 1

In Box 1 income from employment and income (positive or negative) from the property used as the primary residence are taxed. The following categories of income are taxed in Box 1:

  • Profit from private business
  • Income from employment
  • Other income
  • Income from former employment
  • Income from periodic payments like alimony or a private pension
  • Income from privately owned assets used for your own company (B.V. or Limited)
  • Correction deduction from previous tax returns
  • Refunded premiums of a pension scheme

Premiums for annuity schemes and premiums paid as an insurance against loss of income due to disability or illness can be deducted from the taxable income in Box 1.


Box 1 tax rate

The Dutch tax system integrates income tax with the premiums paid for social security. The total taxable income in Box 1 is taxed at different rates in four tax bands:


2017

Tax band Income in euros Tax rate (%) Social security rate (%)
1 0 - 19,982 8.90 27.65
2 19,982 – 33,791 13.15 27.65
3 33,791 – 67,072 40.80 0.00
4 67,072 + 52.00 0.00

2016

Tax band Income in euros Tax rate (%) Social security rate (%)
1 0 - 19,922 8.40 28.15
2 19,922 – 33,715 12.25 28.15
3 33,715 – 66,421 40.40 0.00
4 66,421 + 52.00 0.00

Box 2

In Box 2 income received from a company in the capacity of a substantial shareholder (ownership of more than 5 percent of the issued share capital of that company) is taxed. Box 2 income is considered dividends payment and profit acquired on the sale of shares.

There is a fixed tax rate of 25 percent.


Box 3

Since 2001 income from savings, property (not the principal residence) etc. are taxed in box 3. The balance, as per the beginning of the year, of all assets less liabilities is taxed at a fixed rate of 1.2 percent.

From the 1st January 2017 income from savings, investments and property (not the primary residence) etc. is taxed differently.

The balance, as per the beginning of the year, of all assets less liabilities is taxed at different tax rates and in three tax bands.


2017

Tax band Value in in euros Rate(%)
1 25,000 – 75,000 0.86
2 75,000 – 975,000 1.38
3 975,000+ 1.62

There is a tax-free amount of € 25,000 (for the year 2017) per person.

Information provided by Quintin Eadie, tax advisor at AAme Accountants and Tax Advisors

Tel.: +31(0)15 820 0069 | website | email