If you plan to freelance or run your own business in the Netherlands, you should understand how the Dutch tax system works. This includes which taxes you pay and the key deductions you can make on your tax return.
This guide on freelance taxes in the Netherlands includes advice on the following topics:
- Self-employed tax system in the Netherlands
- Self-employed income tax in the Netherlands
- Registering for self-employed tax in the Netherlands
- Self-employed tax deductions and credits in the Netherlands
- Corporate tax in the Netherlands
- How to file self-employed tax in the Netherlands
- VAT in the Netherlands for self-employed people
- Social security for self-employed workers in the Netherlands
- Combining freelance work and paid employment in the Netherlands
- Self-employed tax fines in the Netherlands
- Associations for entrepreneurs in the Netherlands
- Hiring an accountant or financial adviser
- Useful resources
J.C. Suurmond Tax Consultants
Take the stress out of your taxes in the Netherlands by speaking to the experts at Suurmond. Their consultants provide tailor made advice and personal guidance on a range of Dutch tax matters, helping you navigate the system with ease. With over 30 years experience, their team of experts offer advice and guidance for freelancers and entrepreneurs in the Netherlands.
The freelance tax system in the Netherlands
According to the World Bank, 16.6% of people in the Netherlands are self-employed, including everyone from freelance sole traders to owners of large businesses.
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. These include:
Freelance income tax in the Netherlands
Tax for self-employed sole traders and freelancers in the Netherlands
Self-employed professionals (zelfstandigen zonder personeel – ZZP) who qualify as entrepreneurs can choose to set up a sole proprietorship (eenmanszaak).
Doing so means your business won’t be considered a legal entity that is separate from your personal assets. Ultimately, this means you pay Dutch income tax rather than corporate tax on your profits.
Profits are taxed under the Box 1 – Taxable income from employment and homeownership.
In 2021, earnings up to €68,507 are taxed at 37.1%, while earnings over that limit are taxed at 49.5%.
Self-employed entrepreneurs may be entitled to private business ownership allowance and other entrepreneur allowances. In 2021, those eligible can deduct €6,670 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 was 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 allowance, investment allowance for environmental investments or small projects, or a tax-deferred retirement reserve.
Tax on limited companies in the Netherlands
If you set up a limited liability company as a self-employed entrepreneur or freelancer, such as a Dutch besloten vennootschap (bv), this essentially means that you are an employee of your own company. Therefore, the company has to pay corporate-dividend tax and wage tax to the Dutch tax authorities for you as an employee.
Limited companies are only entitled to tax breaks for investments, such as discretionary depreciation and investment allowance.
Registering for freelance taxes in the Netherlands
If you independently supply goods or services to other parties to make a profit, you need to register your business with the Kamer van Koophandel (KvK), which is the Dutch chamber of commerce.
To register a new sole proprietorship, a professional partnership (maatschap), a general partnership (VOF), or a limited partnership (CV), you must complete an online registration form and schedule an appointment with the KvK through its website.
For your visit to the Kamer van Koophandel, you must bring a valid identification document, your BSN number, and pay a registration fee of €50. During the appointment, you will receive your KvK registration certificate and VAT number.
After registering, the Belastingdienst (the Dutch tax authority) is then automatically informed by the Kamer van Koophandel and you will receive a VAT number.
When to register
It is possible to register your business with the Kamer van Koophandel in three different timeframes:
- 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, we recommend consulting a Dutch tax expert.
Freelance tax deductions and credits in the Netherlands
As a freelancer or self-employed professional, you can 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, and personal devices and computers are not deductible, however.
In case you need a car for your business, then 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.
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.
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. If you work from home, however, things can get more complex. As a result, you can only deduct costs if the following applies:
- The office space is in an independent part of the house. Belastingdienst has some specific criteria for this.
- At least 70% of your income is earned there (if you also have an office elsewhere).
- At least 30% of your income is earned there (if you don’t have an office elsewhere).
Corporate tax in the Netherlands
If you have a private company with limited liability (besloten venoostschaap in Dutch; generally shortened to bv), you must pay corporate tax and dividend tax.
Your bv pays corporate tax over its profits and you are treated as a director and major shareholder (directeur-grootaandeelhouder, DGA), who pays income tax on your salary and perhaps dividend tax.
The corporate tax rate in the Netherlands is 15% for companies with taxable amounts of less than €245,000. However, companies with taxable amounts above €245,000 must pay a rate of 25%.
How to file your freelance taxes in the Netherlands
Once you register your company with the Kamer van Koophandel, the Belastingdienst determines for what taxation types you must submit returns.
For income tax or corporate income tax, you must submit a tax return on an annual basis. For VAT tax, you submit a tax return on an annual, monthly, or quarterly basis. If you employ people, you must also submit a tax return for payroll tax.
You can submit tax returns online through the Belastingdienst 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. You can find an extensive list of exempted professions, goods, and services 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 Belastingdienst.
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 is. You can receive a healthcare allowance from the government (zorgtoeslag) if your income is below a certain level.
Freelancers and self-employed professionals may take out voluntary insurances against some business risks with an insurance company.
Find out even more in our guide to health insurance in the Netherlands.
Combining freelance work and salaried employment in the Netherlands
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 whether you are regarded 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 and 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, female entrepreneurs, or entrepreneurs with a non-Dutch background. The Kamer van Koophandel provides information in English on such organizations and associations in your area.
Additionally, the governmental website Business.gov.nl provides a list with several Dutch organizations which provide information (mostly in Dutch), such as VZZP (Association of Self-employed Workers without Employees), Kunstenbond (creative sector), PZO (Platform for Independent Entrepreneurs), and so on.
Hiring an accountant or financial advisor
Whether you’re a new arrival or you’ve called the Netherlands home for a few years, getting to grips with the Dutch tax system can be fairly complicated. This is especially true should you be subject to any additional tax mechanisms, such as being a freelancer.
However, thankfully there are a number of expat-friendly tax advisors in the Netherlands. These can help with a number of tax-related issues, offering advice and information in English or other languages. Expat-friendly tax advisors in the Netherlands include:
The website Business.gov.nl provides a list of several Dutch organizations that can provide information for freelancers and self-employed professionals. You can find a list of tax advisors in Amsterdam in our directory.
- Doing business in the Netherlands – government information for entrepreneurs
- Belastingdienst – Dutch Tax and Customs Administration
- Ministerie van Buitenlandse Zaken (BuZa) – Dutch Ministry of Foreign Affairs
- Kamer van Koophandel (KvK) – Dutch chamber of commerce
- Immigratie- en Naturalisatiedienst (IND) – Dutch immigration authority
- Ministerie van Financiën (MinFin) – outline of all taxes in the Netherlands, including the 30% ruling.