The Netherlands has one of the most well-established taxation systems in Europe with levies imposed on private individuals and companies. In order to sustain the development of its cities, the Dutch government has enabled cities to collect municipal taxes.

There are several municipal taxes imposed in the Netherlands and what is important to note is that some cities can apply additional charges apart from the ones imposed at a national level.

Below, our specialists explain how municipal taxes are imposed in this country. Foreign investors can also rely on us if they are interested in company registration in the Netherlands.

The most important municipal taxes in the Netherlands

There are several taxes that both Dutch nationals and foreign citizens living here as residents must pay. Among these are the municipal taxes which usually imply:

the property tax which is collected at different rates after an evaluation of the property,
the waste collection tax which is imposed based on the number or persons living in a household,
the water tax and the pollution levy which are imposed differently by every municipality,
road and parking taxes for vehicle owners (this levy is applicable in Amsterdam).

Dutch companies owning boat houses or other movable property from which they operate are also subject to a special municipality tax in Amsterdam.

The collection of municipal taxes in the Netherlands is made after residents register with the local authorities.

Our company formation advisors in the Netherlands can explain the municipal taxes imposed on companies under certain circumstances.

How to register and pay Dutch municipal taxes

As mentioned above, municipal taxes in the Netherlands are applied locally and each city can impose its own levies, such as is the case of Amsterdam which also offers access to owning properties near water.

In the case of foreign citizens moving to the Netherlands, these must register their new address with the local municipality. The address will be recorded in the Personal Records Database alongside the number of persons living there. Also, when moving from one address to another, the change must be announced to the city administration. This is also the case of Dutch citizens moving from one city to another.

If you need details on how to register for the municipal tax with the Dutch Tax Administration, our advisors can provide the necessary information.

Special municipal taxes in the Netherlands

Apart from the levied presented above, there two special municipal taxes in the Netherlands. These are:

- the tourist tax,
- and the tax applied to boat owners providing canal cruises to paying tourists.

As a fun fact, until a few years ago, in Amsterdam, residents had to pay a dog tax which was abolished. However, in other cities various fees can still apply.

Exemptions from Dutch municipal taxes

The Dutch authorities enable taxpayers to benefit from various tax benefits, among which there are also exemptions from the municipal levies. Among these are:

- the waste tax exemption,
- the property tax exemption,
- the movable property exemption,
- the water treatment and the resident water system tax exemptions,
- the pollution tax exemption.

There are several conditions to meet in order to benefit from municipal tax exemptions in the Netherlands. Among these, the payers must have an income that is close to the minimum support income, or they must have very little amounts in their bank accounts.

Also, those who have their municipal taxes deducted from their wages, they will qualify for various benefits.

Students and self-employed persons can also benefit from exemptions from the municipal tax if they meet specific requirements. It is worth noting that the criteria to meet in order to obtain such advantages can imply one or more conditions at the same time and for each situation, the request for the exemption must be supported by documents.

We offer accounting services to natural persons and companies seeking to have a clear understanding of their financial obligations in the Netherlands.

Municipal tax late payments

If one is late with the payment of the municipal tax in the Netherlands, the following steps must be completed:

- a reminder will be sent by the local municipalities, after which the tax can be paid in 7 days,
- failing to pay after receiving the letter, will imply a second reminder under which a 2 weeks extension is given,
- a liability order can be imposed which will attract the payment of the tax within maximum 2 days alongside a penalty,
- in case of failing to pay all three times, the local authorities can have the amount deducted directly from the wage.

For more information on the municipal tax in the Netherlands, please contact our local consultants.