Dutch Income Tax Return

The Dutch income tax return is an annual obligation for all individuals and legal entities that earn income in the Netherlands. The tax system in the Netherlands is complex and includes several different types of tax, such as income tax, corporate tax and VAT. As a self-employed person, you are responsible for managing your own taxes and must file a tax return with the Dutch tax authority, the Belastingdienst. This article deals specifically with the Dutch income tax return and the procedure involved.

What is the Dutch income tax return?

The Dutch income tax return is a declaration of all income earned by an individual or legal entity in the previous calendar year. The income tax system in the Netherlands is based on a progressive tax rate, which means that the more income you earn, the higher your tax rate. The income tax return is used to calculate the amount of tax due or the refund due. 

The Dutch income tax return for self-employed persons is a declaration of all income and expenses related to their business. Self-employed persons must file an annual tax return with the Belastingdienst to report their income and claim any deductions to which they are entitled.

Who has to file an income tax return?

In general, everyone who earns an income in the Netherlands is obliged to file an income tax return. This includes employees, self-employed persons and companies. The Dutch tax year runs from 1 January to 31 December, and the income tax return must be filed before May 1st of the following year.

Self-employed persons must also file their tax return online via the MijnBelastingdienst platform before May 1st of the following year. Before you start filing your tax return, you should gather all relevant financial documents such as an overview of your income statements, invoices, receipts and bank statements.

What income and expenses must be declared in the Dutch self-employed income tax return?

Self-employed persons must declare all income earned during the tax year, including income from their business and from other sources such as rental income or capital gains. They must also declare all business-related expenses, such as rent, utilities, supplies, equipment and travel expenses. Some expenses may not be fully deductible, such as personal expenses or expenses not directly related to the business.

How is income tax calculated?

Income tax in the Netherlands is calculated on the basis of the income earned during the tax year. The income tax system is divided into three different areas, each with its own tax rate:

Box 1: Income from work and home ownership. This includes income from employment, rental income and income from owning a home.
Box 2: Income from a substantial participation in a company or partnership. This includes dividends and profits from ownership of shares in a company.
Box 3: Income from savings and investments. This includes interest, dividends and capital gains.

Each box has its own tax rate and the total tax due is calculated by adding the tax due in each box. There are also various deductions that can reduce the amount of tax due.

How is an income tax return filed?

Income tax returns in the Netherlands can be filed online. The Dutch tax authority, the Belastingdienst, offers an online platform called MijnBelastingdienst where individuals and legal entities can file their tax returns with their DigiD. 

Please read our Gekko blog (in Dutch) for more information about the Dutch income tax return of 2022.