The Taxes in the Netherlands

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The best source of information that I found is Belastingdienst itself. While their English webpage is a bit limited, their Dutch webpage works very well with browser translation. Also the structure is quite clear and easy to navigate, albeit it may become a bit tedious. In the following I try to provide a summary updated for 2026. For extended information, you can always check Belastingdienst. And you can always use my calculator page .

Attention! Beware that this document has no legal validity: if you have doubts, contact a tax advisor.

Be warned: The tax office looks at you. They know who you are and what you do. And like any other country, tax evasion is punished. If they catch you, you will be heavily fined. It is better to be transparent and do as you should from the start than messing around.

Tax system, in general.

Like many other countries, in the Netherlands you must do your tax duties each calendar year. The tax declaration period is usually in the second quarter of the year, for the tax year of the previous year.

The Dutch income tax system is divided in three different sections, called boxes, depending on what they affect:

• Your general income, also known as income tax.
• The income of your (own) business.
• Savings, investments and some property that is not your main home.

It should be pointed that Dutch taxes are worldwide applicable for Dutch tax residents. If you are getting paid by another country or you have belongings in a different country, they normally should be declared in the Netherlands. Tax treaties can prevent double taxation, but the details depend on the country and the type of income, so this is one of those cases where a tax advisor is useful.

Also a key aspect in the Netherlands is that private investment gains are normally not taxed as a separate capital gains tax. For Box 3, Belastingdienst generally taxes a calculated return on your assets. However, since the Supreme Court rulings on Box 3, you can report your actual return if it is lower than the calculated return. And if Belastingdienst decides that your investing activity is actually work, the income can be treated as Box 1 income instead.

Then, the lucky person that put $1,000 into bitcoin when it was at $10 and sold when it was at $10,000 would normally not pay a separate capital gains tax on that private investment gain. But the value of those assets can still be part of Box 3 on 1 January, and from 2025 onward the actual-return route can also matter if the calculated return is higher than the real result.

Box1: income tax and tax ruling

This box includes income from work and your main home. That means that not only your normal job is taxed, but also many other sources of income, such as freelance work, side jobs or income from online sales. The only income that Belastingdienst considers exempt is work carried out for free, where only costs are reimbursed. For instance, helping a friend with house flooring and only getting your materials or travel costs reimbursed. Beware that unlike in some other countries, even occasional income can need to be declared.

How the total tax is calculated, depends on the total income that you have. Basically, there are different tax brackets, depending on the income. Those brackets are progressive, hence the higher the income the higher the tax. To avoid jumps, the brackets are progressive. In 2026, if you have not reached the AOW age, the brackets are the following according to Belastingdienst’s Box 1 rates :

With a taxable income of…

The 30% Tax Ruling

The 30% Tax Ruling, now often called the expatregeling, lets your employer pay part of your salary as a tax-free allowance for extraterritorial costs. In the standard case this can be up to 30% of your salary, which means your taxable salary becomes lower. To calculate the tax brackets you should use the reduced taxable salary from your annual statement.

Attention Beware that to be able to have the 30% tax ruling fully applied in 2026, your yearly salary excluding the tax-free allowance should be higher than €48.013. For employees younger than 30 with a qualifying master’s degree, the 2026 threshold is €36.497. See Belastingdienst’s expatregeling page .

2026 cap From 2026, the maximum tax-free expatregeling allowance is €78.600 for a full year. You reach that cap with a salary of €262.000 or more. If you use the ruling for only part of the year, the maximum is reduced proportionally.

Now with the 30% tax ruling and a pre-taxable income of…

You can see that it is very beneficial to have the 30% tax ruling, especially for salaries reaching the upper bracket. The ruling has changed several times: current decisions can run for a maximum of 5 years, and high salaries are limited by the 2026 cap mentioned above.

Note: The benefit is even bigger, as it also affects the tax breaks, driving your taxes even more down.

If you want more details about Box 1, you can always check the Belastingdienst work page .

Box2: business (aanmerkelijk belang)

This box includes income from a substantial interest in a company, for instance because it is your company or because you own a significant shareholding. I will not elaborate about this box as it is out of the scope of this page: if you are running a business, either you already know about these things or you have an advisor who can inform you better than I could.

Box3: savings and investments (sparen en beleggen)

Like other countries, the Netherlands also taxes assets. In this box we should consider money in bank accounts, investments, crypto, a second home and other property that is not your main home. Your movable personal possessions for private use, such as ordinary furniture, usually do not belong in Box 3. Cars, boats and similar assets can have their own tax rules outside this page.

The most important 2026 points in this box are:

• There is a general exemption of 59.357€ of assets if you are single in 2026. If you have a partner, you should double this amount, but you should also consider joint belongings as well.
• There is still a green investment exemption, but it is much smaller than before. In 2026 the maximum exemption is 26.715€ without a fiscal partner and 53.430€ with a fiscal partner. The extra tax credit for green investments is also only 0,1% of the exempted green amount. The investment must be in a recognised green fund or green savings product. See Belastingdienst’s green investments page .
• Partial foreign tax liability is no longer generally available from the 2025 tax return. If you already used the expatregeling before 2024, transitional rules can still let you use partial foreign tax liability up to and including your 2026 tax return. For Box 3, this can mean you only declare specific Dutch assets, instead of worldwide assets. See Belastingdienst’s partial foreign tax liability page .
• If your actual return is lower than the fictitious return, you can report the actual return. For 2025 and later this is part of the income tax return itself. Belastingdienst then uses the most favourable outcome for you. See Belastingdienst’s actual return page .

In the Netherlands you pay tax on the savings/investment return, but instead of always using the real return, Belastingdienst normally calculates a fictitious return. For the 2026 provisional assessment, Belastingdienst uses different return percentages depending on the type of asset: 1,28% for bank and savings balances, 6,00% for investments and other assets, and 2,70% for debts. Over the calculated Box 3 income, you pay 36% tax. Full information is available on the Belastingdienst Box 3 page and the 2026 Box 3 calculation page .

The 2026 rates used in the provisional assessment are the following:

If you are single and you have…

Calculator note The savings calculator on this page assumes that all Box 3 assets are bank savings and that there are no debts, green investments or fiscal partner. Mixed portfolios need a fuller calculation.

The tax credits:

Not everything has to be bad news. As taxes in general are quite high, there are some tax discounts that you can benefit from, depending on your particular situation. There are several reasons and several sources of tax credits, for instance, having little income, being a worker or having a certain age.

The two most usual tax credits are:

Numbers will be different if you have reached or are close to the AOW age, or you have any other special situation. To know the full details, you should check the general Belastingdienst page for tax credits , contact them or talk with a tax advisor.

Health expenses tax discount:

This is still valid in 2026, but Belastingdienst calls it the deduction for specific healthcare costs (aftrek specifieke zorgkosten) and there are strict limits. You can only deduct qualifying costs related to illness or disability, only in the year you paid them, and only for the part that is not reimbursed and cannot be reimbursed by your insurance or another party.

BEWARE that some limitations apply:

• Health insurance premiums, statutory contributions, the mandatory eigen risico and voluntary eigen risico are not deductible.
• There is a personal threshold that you must exceed before any healthcare costs become deductible. In 2026, without a fiscal partner, the threshold is 166€ up to 9.680€ threshold income, 1,65% from 9.681€ to 51.411€, and 848€ plus 5,75% of the amount above 51.411€.
• With a fiscal partner, you combine both partners’ specific healthcare costs and threshold income. In 2026, the threshold is 332€ up to 19.360€ combined threshold income, 1,65% from 19.361€ to 51.411€, and 848€ plus 5,75% of the amount above 51.411€.
• Some costs can be deductible, such as dentist, physiotherapy, specialist care, prescribed medicines, some medical aids and transport for medical treatment. Other costs, such as glasses, contact lenses, rollators, wheelchairs, and non-contracted care costs, are generally not deductible.
• If your 2026 threshold income is not higher than 41.123€, some specific healthcare costs can be increased by 40%, or 113% if you or your fiscal partner had reached the AOW age on 1 January. This increase does not apply to medical treatment costs or sick-visit travel costs.
• You will need proof of payment and paperwork that proves the expenses.

For instance, having a qualifying dental implant that costs 2.000€ while receiving 500€ from dental insurance may leave 1.500€ of possible specific healthcare costs. Whether it actually reduces your tax depends on your threshold and on whether the cost qualifies. You can see the details in Belastingdienst’s 2026 deductible healthcare costs overview , 2026 threshold page , and specific healthcare costs chapter .

BEWARE!: You can usually file or correct old tax declarations up to 5 years back. In 2026, Belastingdienst says you can still file over 2021 if you did not receive a request to file.

Doing your tax declaration.

As stated previously, in the second quarter of the year you usually do the tax calculation of the previous calendar year. If you receive a tax return letter, you must file. If you did not receive one, Belastingdienst says you still need to file if the amount to pay is above the assessment threshold. For 2026 that threshold is 58€.

Also, Belastingdienst can request you to do a tax declaration at any time. For that they will send you a letter in a blue envelope to your mailbox. If that is the case, you cannot refuse, and you should present your declaration before the deadline pointed in the letter.

Do not trust phone calls or emails asking for direct payment or sensitive data. Belastingdienst normally contacts you via mail if they have a formal requirement. And in any case, you can always call one of the official Belastingdienst numbers .

Doing a standard tax declaration is quite easy. With DigiD you just need to go to “Mijn Belastingdienst ” and fill in the requested data. In fact, Belastingdienst will have already most of your data prefilled, you just need to ensure that data is correct with the yearly summary (jaaropgave), both from your employer and your bank statements. And as usual, browser translation helps a lot.

The M form, the first year declaration and the magic cashback.

When you move to the Netherlands and you start working, the company can withhold payroll tax as if you had been working with that same income from the start of the year. That means that your final yearly tax can be different from the monthly withholding, and you may have paid more tax than needed depending on when you started.

However, as it is the migration year, instead of doing a standard tax declaration you have to file an M return. The good news is that Belastingdienst now allows you to do this online for recent migration years through Mijn Belastingdienst. If you cannot or do not want to file online, you can still request the paper M form.

My advice here: ask a tax advisor what your tax return would be and then file the M return if it is beneficial for you.

Receiving extra payments: bonus, holidays, etc.

A typical issue that we will find is that any extra payment has heavy taxes. That is a common issue when transforming unused holidays into cash or when receiving a previous year bonus. While it could be that the company applied a high special withholding rate to that payment, often what occurs is that there is a tax re-adjustment due to the new yearly amounts. What does it mean?

As the taxes are calculated for a full calendar year, all calculations were done as of 1st January with your ‘expected’ salary, that is without bonus, holidays nor salary increases. When you get bonus payments then:

• Extra payments are added on top of your current salary, therefore, they are taxed at your highest bracket, not at your average tax.
• If the amount is high enough, part of it can end up in a higher bracket. For instance, in 2026 the upper bracket starts above 78.426€. Imagine you are close to the limit with 76.426€ and you receive a bonus of 4.000€. From those 4.000€, the first 2.000€ will be in the 37,56% bracket and would pay 751€, while the other 2.000€ will be in the highest bracket and pay 990€, hence the 4.000€ would be reduced to 2.259€, resulting an average tax of almost 44%, before considering tax credits.
• Furthermore, the tax credits should also be calculated (reduced) as your salary now is higher. From some lines above, in 2026 the general tax credit and labor tax credit can be reduced at rates of 6,398% and 6,510%, respectively, further impacting the total value.

Just to put an example, assuming that your bonus falls in the 37,56% bracket and both credits are reducing, the final tax would be the 37,56% tax plus up to 12,908% from the tax credits loss, which results in about 50,47% special tax.

Tax advisors, variety in price and service.

When I chose to do an M-form years ago, I started evaluating different possibilities. At that time I decided to search for tax advisors.

I found a very famous expat webpage offering tax advisor services that seemed expensive for what I needed. Some providers were also charging for simple administrative tasks, such as DigiD requests, that many people can do themselves in a few minutes.

After seeing that, I decided to inquire with other tax advisors. Prices and service levels varied a lot. In the end, I selected one that provided good customer service and took care of everything by email.