Freelance taxes in the Netherlands

The Netherlands has a comprehensive tax system to help fund its equally expansive social welfare program. The Dutch government expects a fair share of consumed goods, property, and worldwide income, including any profits made from independent (side) hustles. This also applies to frequent sellers on an online platform like Marktplaats or Vinted.

Learn more about freelance taxes tax in the Netherlands by reading the following sections:

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Freelance taxes in the Netherlands

According to the World Bank (2022), 16.4% of people in the Netherlands are self-employed, including everyone from freelance sole traders to owners of large businesses.

Whatever the size of your company, you’ll need to pay taxes, but whether you’ll be liable for Dutch income tax (inkomstenbelasting) or corporate tax (vennootschapsbelasting – VPB) on your profits depends on the type of business you run.

The Dutch Tax Office (Belastingdienst) oversees national taxes in the Netherlands.

To ensure you avoid any tax pitfalls while going freelance in the Netherlands, you may wish to consult professionals. Thankfully, there are a number of expat-friendly tax advisors who work with freelancers in the Netherlands.

Expatica Netherlands Directory

Accountants and tax advisors in the Netherlands

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Freelance income tax in the Netherlands

Tax for self-employed sole traders and freelancers

Some self-employed professionals (zelfstandigen zonder personeel – ZZP’er) qualify as entrepreneurs, allowing them to set up as a sole trader (eenmanszaak).

Doing so means your business won’t be considered a legal entity that is separate from your personal assets. Ultimately, this permits you pay Dutch income tax rather than corporate tax on your profits.

Profits are taxed under Box 1 (taxable income from employment and homeownership). The rate you’ll pay depends on your age and income:

Self-employed entrepreneurs may be entitled to private business ownership allowance and other entrepreneur allowances. In 2024, those eligible can deduct €3,750 from their profits when filing their tax returns. This deduction will be gradually reduced between now and 2036 when it will be set at €3,240.

Tax for partnerships in the Netherlands

In a partnership, each partner pays income tax on their own share of the profits, as if it were earned directly. Partners are thus individual self-employed workers and may be able to enjoy certain tax benefits and exemptions.

These can include an entrepreneur’s allowance (ondernemersaftrek), private business ownership allowance (zelfstandigenaftrek), SME profit exemption (mkb-winstvrijstelling), or a tax-deferred retirement reserve.

Tax on limited companies in the Netherlands

If you set up a limited liability company (besloten vennootschap – BV) as a self-employed entrepreneur or freelancer, you’re essentially seen as an employee of your own enterprise. Therefore, you have to pay corporate-dividend tax and wage tax to the Dutch Tax Office for yourself as an employee.

Limited companies are only entitled to tax breaks for investments, such as discretionary depreciation and investment allowance.

How to register for freelance taxes in the Netherlands?

If you independently supply goods or services for a profit, you must register your business with the Dutch Chamber of Commerce (Kamer van Koophandel – KvK). You can do so by making an appointment online. In 2024, registering a new company costs €80.10.

You’ll need to provide a valid ID and your Citizen Service Number (Burgerservicenummer – BSN). After paying the fee, you’ll receive your KvK registration certificate and VAT number.

The KvK will automatically inform the Dutch Tax Office of your new enterprise.

When can you register your company?

It is possible to register your business with the Kamer van Koophandel in three different time frames:

• No later than one week after starting your business
• One week prior to starting your business
• Earlier. In that case, the registration becomes official one week prior to the start of your business.

Limited liability companies are more complex to set up than non-limited liability companies since you must form a corporation together with a Dutch notary. In that case, it’s recommended you consult a Dutch tax expert.

Freelance tax deductions and credits in the Netherlands

As a freelancer or self-employed professional, you qualify for tax facilities, subsidies, and benefits.

Tax deductions for freelancers

Business expense deductions can include costs for equipment, travel, marketing, legal, accountancy, and services from third parties. However, dinners, gifts, and study trip costs are only partially deductible. Clothes, fines, personal devices, and computers are not deductible, however.

If you need a car for your business, you have two options. You can use your own private car for the business or put a car on the balance of the company.

As a non-limited liability company, self-employed entrepreneurs, and freelancers can also apply for certain entrepreneur facilities such as investment allowance, tax-deferred retirement reserve, and entrepreneur allowance (tax credits), such as:

• Private business ownership allowance (zelfstandigenaftrek): If you pay income tax in the Netherlands, you are eligible as an entrepreneur. This will then reduce your taxable income.
• Tax relief for new companies (startersaftrek): an increase in the private business ownership allowance intended for new businesses.
• Small business scheme (kleineondernemersregeling): If you are eligible for the small business scheme, you pay less VAT.
• Microcredit: is available for (startup) businesses in need of a loan or guidance. This scheme consists of a loan of up to €50,000 and coaching.
• SME profit exemption (MKB-winstvrijstelling): an allowable deduction for small and medium-sized enterprises. The number of hours you work for your business is irrelevant in this respect. After deducting the allowances above from their profit, entrepreneurs are entitled to an extra 14% tax relief.

Hour criterion

To fulfill the allowances above, you must meet rules around working hours. This means you have to be active for at least 1,225 hours a year (about 25 hours per week). This includes hours spent on traveling, market research, and administration. In your first year, it is important to keep note of your working hours.

Depreciation of company assets

Dutch tax law has specific rules when it comes to the depreciation of assets.

Regarding goodwill, the amortization for tax purposes is limited to 10% of the purchase price per year. On the other hand, most investments (inventory such as computers, desks, equipment, and tools) have a maximum depreciation rate of 20%. The amortization of the asset takes a maximum of five years.

For assets costing less than €450, you can deduct the entire amount from your earnings in your tax return.

Deductions when you work from home

If you are renting business premises, the costs you pay are tax-deductible. However, if you work from home, things can get more complex. The Dutch Tax Office has a calculator tool (Rekenhulp Werkruimte) to help you determine what costs you can deduct for a workspace in your home.

Corporate tax in the Netherlands

If you have a private company with limited liability (i.e., a BV), you must pay corporate tax and dividend tax.

Your company pays corporate income tax on its profits, and you are treated as a director and major shareholder (directeur-grootaandeelhouder – DGA) who is liable for income tax.

The 2024 corporate tax rate is 19% for profits up to €200,000 and 25.8% for anything above that.

Finance

Corporate tax in the Netherlands

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How to file your freelance taxes in the Netherlands

Once you register your company with the Chamber of Commerce, the Dutch Tax Office determines which tax you are liable for.

You must submit an annual tax return for income tax or corporate income tax. For value-added tax (VAT – omzetbelasting or, more commonly, Belasting Toegevoegde Waarde – BTW), you submit a return on an annual, monthly, or quarterly basis. Employers must also submit a return for payroll tax.

You can submit tax returns online through the Dutch Tax Office website. You may also outsource your tax return work to an intermediary, such as a payroll manager, accountant, or tax consultant.

VAT in the Netherlands for self-employed people

If you run a business in the Netherlands, you may also have to pay turnover tax (VAT). You can pay VAT annually, monthly, or quarterly, depending on the type of business you have and your turnover.

VAT rates are 21% or 9%, depending on the type of product or service. Many common products and services, such as food, drinks, medicines, books, online publications, and magazines, qualify for the 9% rate.

It is compulsory for businesses to charge VAT when invoicing their clients, although there are some exceptions. If you teach educational courses or provide educational training, for example, you may be VAT-exempt.

Services provided by journalists, composers, and authors are also VAT-exempt, as are medical services and products. An extensive list of exempted professions, goods, and services is available on the Dutch Tax Office website under vrijstellingen (in Dutch).

Special tax facility

A self-employed entrepreneur or freelancer who does not have large sums of VAT in their administration can apply for a special tax facility called kleine ondernemersregeling (small-sized entrepreneurs regulation). In that case, you pay less VAT or no VAT at all. This regulation is only available to those who have a non-limited company (Eenmanszaak/CV/VOF).

In order to apply for this special tax facility, you need to file a request with the Dutch Tax Office.

Social security for self-employed workers in the Netherlands

Self-employed professionals in the Netherlands don’t have mandatory insurance for illness, invalidity, or unemployment. This means that they must make arrangements for these kinds of social insurances themselves if they want to receive any of those benefits.

On the other hand, national insurance schemes (social security) apply, mainly because these schemes are compulsory for everyone working or living in the Netherlands. Freelancers and self-employed professionals in the Netherlands pay national insurance contributions through their income tax.

All residents in the Netherlands need to pay a premium of around €1,300 per year for basic health insurance. Entrepreneurs and freelancers also need to pay an income-related contribution. This contribution is on top of the premium that you pay to the healthcare insurer of your choice.

Generally, the higher your income, the higher your contribution. However, you can receive a healthcare allowance from the government (zorgtoeslag) if your income is below a certain level.

Voluntary insurance

Freelancers and self-employed professionals may take out voluntary insurance against some business risks with an insurance company. Find out more in our article on health insurance in the Netherlands.

What if you combine freelance work and salaried employment?

If you combine freelance work and paid employment, the authorities consider you a part-time entrepreneur.

It is important to note that if you start your business in addition to your job, you must discuss your plans with your employer. Sometimes, it is necessary to deal with a non-compete or a non-solicitation clause.

Even when you leave the company, these clauses may still apply temporarily. If you have a fixed-term contract, your employer may only include such clauses in extraordinary circumstances.

Working for clients

If you are doing long-term freelance work for clients, they need to know your status as an entrepreneur. Otherwise, they may have to pay income tax and insurance contributions for you. In this case, you can prove that you are truly an entrepreneur with a model agreement.

Freelancers, self-employed professionals, and their clients can choose to work according to three different kinds of standard model agreements.

Self-employed tax fines in the Netherlands

If you fail to pay your income bill on time, you may be fined 3% of the amount outstanding. If you file your tax return late, you’ll need to pay a €65 administration fee. You could be fined a total of €5,278 if you continually fail to pay your taxes on time.

Associations for entrepreneurs in the Netherlands

There are associations for specific branches and special interest groups for young entrepreneurs, women entrepreneurs, or entrepreneurs with a non-Dutch background. The Dutch Chamber of Commerce provides information in English on such organizations and associations in your area.

Additionally, the governmental website Business.gov.nl provides a list of several Dutch organizations that provide information (mostly in Dutch), such as Kunstenbond (creative sector) and PZO (Platform for Independent Entrepreneurs).

Hiring an accountant or financial advisor

Whether you’re a new arrival or you’ve lived in the Netherlands for a few years, the Dutch tax system can seem fairly complicated. This is especially true if you are liable for any additional taxes, such as freelance tax.

There are a number of expat-friendly tax advisors in the Netherlands that can help you out in English or other languages. These include:

• Expat Service
• HBK (SAS for Expats)
• J.C. Suurmond & zn. Tax Consultants
• The TaxSavers

The website Business.gov.nl also provides a list of several Dutch organizations that can provide information for freelancers and self-employed professionals.

Useful resources

• Business.gov – government resource for entrepreneurs and businesses in the Netherlands
• Dutch Tax Office – official government website for the Dutch tax authority
• Dutch Chamber of Commerce – official website for company registrations