Dutch citizens and foreign nationals living in the Netherlands
are subject to similar taxation rules, however, they can also benefit from some of the most appealing allowances in Europe. One of the taxes that needs to be paid by private individuals is the wealth tax
The wealth tax in the Netherlands is levied on various assets held by both Dutch and foreign nationals and our local specialists can offer detailed information on how this levy is applied.
We offer full Dutch company formation
and accounting services to local and foreign citizens with various activities in this country, therefore we invite you to ask if you have any questions related to the wealth tax
Types of incomes entering the wealth category in the Netherlands
In order to be taxed, an individual is required to file his/her tax returns
with the Dutch Tax Administration, following which the levy will be imposed.
In order to be imposed the wealth tax in the Netherlands, one must first file the income tax under the Box tax system which covers three main types of incomes associated with the source of money. Under this system, wealth corresponds to Box 3 which covers the following categories of income:
- property ownership;
Just like in the case of the income tax applied on employment earnings
, the Dutch wealth will be levied differently on residents and non-residents in the Netherlands.
If you want to open a company in the Netherlands, you should know that you can be taxed as a shareholder and benefit from various advantages which can be explained by our company registration advisors.
Wealth tax reporting requirements as a Dutch resident
The Netherlands is a very appealing country for starting a business
or having a job which is why most foreign citizens relocating here apply for residency. Once they do that, they will be subject to the same taxes as Dutch citizens.
When it comes to the wealth tax in the Netherlands, residents must report the following upon filing their tax returns:
savings, no matter if these are held in local or foreign bank accounts;
investment accounts which will be subject to the wealth tax based on the amount;
cash savings must also be reported in the tax returns of the taxpayer;
real estate ownership (apart from the dwelling place which is taxed separately);
assets, such as company shares and trust funds which are taxed under specific rules.
It should be noted that Dutch residents will be imposed the wealth tax on their worldwide income derived from the above-mentioned sources.
Non-residents and the wealth tax in the Netherlands
Foreign citizens who have made profits in the Netherlands without being residents of this country will pay the wealth tax
on the income obtained here. However, they are required to report the income to the Dutch tax authorities
and to the tax agencies in their countries, as some incomes can be taxed twice – a situation which can be avoided if a double tax treaty is in place. The Netherlands has one of the most extensive networks of double taxation agreements in Europe.
Wealth tax rates in the Netherlands
Out of the income tax, the Dutch wealth tax represents only a fraction when it comes to the rates imposed, as it follows:
- the first 30,360 euros are exempt from taxation in the Netherlands;
- 0.58% is the wealth tax levied on an annual income raging between 30,361 and 102,010 euros;
- 1.34% is the wealth tax imposed on income between 102,011 and 1,020,096 euros;
- any amount surpassing 1,020,096 euros will be taxed at 1,68%.
There also a few particularities associated with the wealth tax in the Netherlands and one of the most important refer to the fact that it is calculated based on the assets declared in the tax return.
Another important aspect to consider when it comes to the taxes paid in the Netherlands
is that if the wealth tax is applied, then there are no capital gains taxes levied on investments.
When it comes to real estate ownership, it should be noted that properties located in another country than the Netherlands will not be considered for the wealth tax here.
While other countries have the capital gains tax, the Netherlands has the wealth tax which from some points of view can be more attractive. Under Box 3, income can be taxed at a maximum rate of 30%, however, when a double tax treaty is in place, the rate can decrease substantially.