General Tax Credit System in the Netherlands

Both local and foreign citizens can benefit from the tax allowances and deductions available in the Netherlands. These are all gathered under the general tax credit system in the Netherlands.

Those who want to relocate in the Netherlands and thus benefit from the general tax credit will first need to obtain a work contract with a local company.

Our company formation agents in the Netherlands can offer information on the taxation system and on the general tax credit system applicable. We can also help foreign investors who want to open Dutch companies.

What is the Dutch general tax credit?

The general tax credit implies a break from the income tax of an individual residing and working the in the Netherlands. It is important to mention that the income tax is made up of several types of income.

Also, the Dutch general tax credit can include incomes derived from:

• -          owning real estate properties in the Netherlands;
• -          employment income;
• -          retirement income.

The tax credit is calculated based on the income generated during a calendar year.

How to benefit from the general tax credit system in the Netherlands

In order to benefit from the deductions and allowances of the Dutch general tax credit system, an individual must file the requested returns with the tax authorities in the city they live in.

Among the benefits granted under the general tax credit system in the Netherlands are:

• -          individuals can benefit from tax subsidies for renting houses in the Netherlands;
• -          subsidies are also available for those who have children enrolled with local schools;
• -          those who have healthcare insurances in the Netherlands are also eligible for tax deductions;
• -          there are also certain tax benefits for the spouses of employees of Dutch companies.

Dutch workers are also allowed to apply for the employment credit granted by the authorities.

In order to take advantage of the general tax credit, an employee is required to file their annual tax returns by checking the corresponding boxes in the papers.

For detailed information on the general tax credit system and the available tax deductions in the Netherlands, do not hesitate to contact us. You can also rely on us for company registration and accounting services in the Netherlands.