Netherlands Highlights:
- A sponsorship solution is the most efficient and effective way to deploy local and foreign employees in the Netherlands.
- 1WB offers a sponsorship solution ensuring full compliance with country’s regulations.
- The whole deployment process for foreigners takes about 4 weeks whereas for locals within 1 day.
- Handling payroll processing, immigration and taxes compliantly, swiftly and cost efficient.
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Personal income tax rates:
In the Netherlands, worldwide income is divided into three different types of taxable income and each income type is taxed separately under its own schedule, referred to as a “box”.
Each box has its own tax rates.
An individual’s taxable income is based on the aggregate income in these three boxes.
Box 1 refers to taxable income from work and home ownership and includes the following:
Employment income
Home ownership of a principal residence (deemed income)
Periodic receipts and payments
Benefits relating to income provisions
Box 2 refers to taxable income from a substantial interest and box 3 applies to taxable income from savings and investments.
Rates for box 1 income:
| Col 1 -Taxable Income OVER (EUR) | Taxable income NOT OVER | Tax on Column 1 | Tax on Excess |
|---|---|---|---|
| 0 | 20,711* | 9.7% | |
| 20,711 | 34,712* | 2,009 Eur | 9.7% |
| 34,712 | 68,507 | 3,288 Eur | 37.35% |
| 68,507 | 15,989 Eur | 49.5% |
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*In the 1st and 2nd bracket of box 1, national insurance tax is levied at a rate of 27.65%.
Box 2 income is taxed at a flat rate of 25%.
Box 3 income is taxed at a flat rate of 30%.
- 30% ruling If certain conditions are met, a foreign employee working in the Netherlands may be granted the so-called 30% ruling. Under this ruling, a tax-free reimbursement amounting to 30% of the income from active employment can be paid to the employee. The 30% reimbursement is intended to cover all extra territorial costs such as double housing, language courses, costs related to residence permits, exchanging driver’s license and home leave. If the 30% ruling is applied, the actual extra territorial costs may not be reimbursed tax-free in addition to the 30% reimbursement. If the actual extra territorial costs and higher than the 30% reimbursement, the higher costs can be reimbursed tax-free. As of 1 January 2019, the maximum term of the 30% ruling has been reduced from 8 to 5 years. The reduction of the 30% ruling applies to both new and existing cases.
- The corporate tax rates are 16.5% on the first EUR 200.000 of taxable profits and 25% on taxable profits exceeding EUR 200.000.
- Social security contributions - on employment income are payable by both the employer and the employee. The contributions are calculated on gross salary, less pension premiums withheld from the salary. An income-dependent health insurance contribution, disability insurance contribution and unemployment insurance contribution also are levied.
- Work permit - 1WB can sponsor work permits for foreign employees and the processing time is about 1 month.