Netherlands

Overview

Last reviewed - 02 July 2021

The Kingdom of the Netherlands is a parliamentary democracy headed by a constitutional monarch following the common law system. The Kingdom comprises a Caribbean part (the Lesser Antilles islands of Aruba, Curacao, and St Maarten), and the continental European country of the Netherlands (proper) located in Northwest Europe, which is bordered by the North Sea to the north and west, Belgium to the south, and Germany to the east. The countries that form the Carribean part of the Kingdom, have their own tax systems.

The country of the Netherlands is divided into 12 provinces found on the continent and three special municipalities in the Caribbean. The latter, Bonaire, Saint Eustatius and Saba, fall under a separate tax regime, which is not discussed here. Amsterdam serves as the Dutch capital whereas The Hague is the governmental and parliamentary seat. The official language of the Netherlands is Dutch, and the currency is the euro (EUR). The Netherlands was a founding member of the North Atlantic Treaty Organization (NATO) and the European Economic Community (EEC) which later developed into the European Union (EU). The Netherlands also participated in the introduction of the euro in 1999. The Netherlands is also a founding member of the Organisation for Economic Co-operation and Development (OECD) (1957).

Throughout its organised inhabited history, the Netherlands and its people have been on the crossroads of differing influences. Around the turn of the first millennium of the Common Era, Germanic tribes bordered the Roman civilization along the Rhine river. During the Middle Ages, semi-independent city-states faced federated centralisation efforts of larger empires, eventually consolidating the greater Benelux area in the loosely connected yet rather decentralised cooperation of the Seventeen Provinces. Canonal and commercial conflicts of interest led to the Dutch Revolt with most northern of the Seventeen Provinces declaring independence from Spanish rule in 1579. 

During the 17th century, they became a leading seafaring and commercial power, with settlements and colonies around the globe. After a 20-year French occupation during the early Modern Age, a Kingdom of the Netherlands was formed in 1815 as formalised successor state to the Seventeen Provinces. Being officially neutral during the First World War, the Netherlands suffered a 5-year long occupation by the Nazis during the Second World War.

The many foreign influences, some voluntary, some forcibly, are still visible to this very day, even in the legal and tax system. The Romans introduced property taxes, the city-states left their tariffs, the French designed the civil code, and the Nazis introduced the corporate income tax. Nowadays, some parts of Dutch tax law originate from EU law legislation adopted in Brussels. 

The Dutch economy is noted for stable industrial relations, moderate unemployment and inflation, a sizable current account surplus, and plays an important role as a European transportation hub. A modern, professional services-oriented nation, the Netherlands is also a large exporter of agricultural products. Industrial activity is predominantly in food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanised agricultural sector employs only 2 per cent of the labour force but provides large surpluses for the food-processing industry and for exports. 

The long-lasting history of commerce results in a government ambition of attracting foreign direct investments through tax incentives such as the participation exemption, innovation box regime, around a 100 tax treaties with foreign nations. As part of the Rhineland influence area, a stronger-than-Anglosaxon emphasis is placed on the social welfare state. Under the common law system, legislation generally prevails over jurisprudence. The judicial system serves as a stopgap of the legislative and executive branches of government.

The Caribbean part of the Netherlands (i.e. the islands of Bonaire, Saint Eustatius, and Saba) maintains a tax regime that is slightly different from that of the country of the Netherlands (in Europe). Inter-Kingdom tax matters are regulated through a so-called “Belastingregeling”, for instance between the Netherlands (proper) and Aruba. 

PwC is a leading professional service organisation in the Netherlands, with over 5,500 employees working to build trust in society and solve important problems. Within PwC, we work together to reimagine the possible while caring for our clients and our colleagues. We act with integrity when making a difference by developing and implementing custom solutions according to the needs of both domestic and international customers.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)

25

Corporate income tax (CIT) due dates
CIT return due date

Generally five months after the end of the company’s fiscal year.

CIT final payment due date

Tax is due within two months of the date of the assessment.

CIT estimated payment due dates

In principle, within two months but the taxpayer may choose to pay in monthly installments.

Personal income tax (PIT) rates
Headline PIT rate (%)

49.50

Personal income tax (PIT) due dates
PIT return due date

1 May

PIT final payment due date

The PIT payment is due within six weeks after the date of the assessment notice.

PIT estimated payment due dates

Estimated income tax payments are due in terms of payments of one month in case of a provisional tax assessment that is issued in the year to which the tax assessment relates.

Value-added tax (VAT) rates
Standard VAT rate (%)

21

Withholding tax (WHT) rates
WHT rates (%) (Dividends/Interest/Royalties)

Resident: 15 / 0* / 0*;

Non-resident: 15 / 0* / 0*

*As of 1 January 2021, there is a conditional WHT on interest and royalties, please refer to the section on Withholding tax.

Capital gains tax (CGT) rates
Headline corporate capital gains tax rate (%)

Capital gains are subject to the normal CIT rate (25%). Capital gains on qualifying participations are tax exempt under the participation exemption.

Headline individual capital gains tax rate (%)

NA

Net wealth/worth tax rates
Headline net wealth/worth tax rate (%)

The Netherlands have no tax on wealth, but they do have a tax on a fixed return on wealth. The headline effective tax rate is 1.60% on the worth of a person's savings and investments.

Inheritance and gift tax rates
Headline inheritance tax rate (%)

40

Headline gift tax rate (%)

40

NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.