Dutch tax rates in 2023 | KVK (2024)

Dutch tax rates are updated every year. Here you can find an overview of various tax rates in 2023. Use this information for your financial planning and tax matters.

Turnover tax (VAT)

Turnover tax or VAT is the tax you pay on your sales. The standard VAT rate is 21%. You charge VAT to your customer. You can reclaim the VAT you paid on expenses and investments. You remit the difference to the tax authorities, usually quarterly.

Some goods and services are subject to the reduced rate of 9%, the 0% rate, or an exemption. For more information, visit the website of the tax authorities(in Dutch).

If your annual turnover is below €20,000, you qualify to apply for the Small Businesses Scheme(KOR). You will not have to charge VAT to your customers, but cannot offset paid VAT either. Get advice from your bookkeeper, accountant or tax consultant on whether this arrangement works for you.

Income tax

You pay income tax on your personal income. Entrepreneurs with an eenmanszaak (sole proprietorship), vof (general partnership), or maatschap (partnership) qualify for the entrepreneur allowance (ondernemersaftrek) and SME profit exemption (mkb-winstvrijstelling). This reduces the taxable profit from your business and helps reduce your tax burden.

Entrepreneur allowance

Did you spend more than 1,225 hours working for your business? That means you meet the hours criterion and are eligible for the entrepreneur allowance. An important part of this deduction is the private business ownership allowance (zelfstandigenaftrek), which is €5,030 in 2023. In 2022, the deduction was €6,310. This amount will be reduced in the coming years to €900 in 2027.

Is your taxable income €73,071 or more? Then you can no longer deduct personal allowances at the rate in the highest tax bracket. The maximum deduction rate is limited to 36.93% in 2023. In 2022, it was 40%. This applies to the entrepreneur allowance, SME profit exemption, personal allowances, and paid mortgage interest. When you fill out the return, the rate is calculated automatically. The deduction limit does not apply to annuity expenses within the annual and reserve margin.

SME profit exemption 2023

On the profit remaining after deducting the entrepreneur allowance, you are allowed to deduct the 14% SME profit exemption. This is also subject to a maximum deduction rate of 36.93%.

Income tax rate

Box 1: Income from work

In box 1, your income from work is taxed in two brackets. This also includes business profits. The 2023 tax brackets are:

IncomeTax rate
up to € 73,071 36.93% (37.07% in 2022)
from € 73,07149.50% (unchanged)

A rate of 19.03% applies to state pension recipients for amounts to €37,149 (€38,703 if you were born before 1946).

Box 2: Income from substantial holdings

Do you and your tax partner own at least 5% of the shares or profit shares in a corporation, or voting rights in a coöperatie (cooperative)? Then you have a substantial holding. The profit you receive from a substantial holding is taxed in income tax box 2 at a substantial holding rate of 26.90%. In distributing profits to you, the company has already withheld 15% dividend tax. These rates are the same as in 2022. This dividend tax paid will be deducted from the tax you have to pay in box 2. So you effectively pay 11.9% tax in box 2.

Box 3: Income from assets

Assets, such as savings or a second home, are taxed in income tax box 3. There is an annual exempt amount of €57,000. This is the exempt amount for box 3 in 2023.

How to calculate (notional) returns has been the subject of much debate in recent years. The Box 3 Bridging Act will apply from 2023. This act introduces a new way to calculate income from savings and investments. This new method is based on the actual split between savings and investments. The assumed returns are determined retrospectively and therefore better reflect reality.

The assumed returns are subject to a 32% tax rate. In 2022, it was 31%.

Tax credits 2023

You deduct the tax credits from the calculated income tax in the 3 boxes. Which tax credits you qualify for depends on your personal situation and income.

Type of creditAmount

General tax credit 2023 (heffingskorting), for every taxpayer.

Up to €3,070 for everyone under the state pension age (€2,874 in 2022).
For incomes greater than €22,661, the general tax credit is reduced by 6.095% of the difference between the income and the base level credit. For people with an income of €73,031 or more, the general tax credit is €0.00.
Employment tax credit 2023 (arbeidskorting), for everyone with income from work.Tot AOW-leeftijd maximaal € 5.052 (€ 4.260 in 2022)
Up to €5,052 for everyone under the state pension age (€4,260 in 2022).
For incomes greater than €37,697, the labour credit is reduced by 6.51% of the difference between the income and the base level credit. For people with an income of €115,301 or more, the employment tax credit is €0.00.

Income-related combination credit 2023 (Inkomensafhankelijke combinatiekorting), for the parent of a child under 12 years of age, with an income of at least €5,547, without a tax partner or with a lower income than their tax partner.

Up to €2,694 (€2,534 in 2022).
For income from labour starting at €5,547, the credit is: 11.45% x (income from labour - €5,547).

Elderly person's tax credit 2023 (ouderenkorting), for taxpayers of state pension age or older, and with a combined income up to €40,888.

Up to €1,835 (€1,726 in 2022).
For an aggregate income of €40,888 or more, the elderly tax credit is reduced by 15% of (aggregate income - €40,888).

Single elderly person's tax credit2023 (Alleenstaandeouderenkorting), for those receiving state pension benefits without a partner.

€ 478 (€ 449 in 2022)

Young disabled person's tax credit2022 (Jonggehandicaptenkorting ), for individuals with Wajong benefits who are not eligible for an elderly person's tax credit.

€ 771 (€ 771 in 2022)

Tax credit for green investments 2023 (heffingskorting voor groen beleggingen).

0.7% of the balance of green investments. Capped at €65,072 per person.

Corporate income tax 2023

If you are a partner in a legal entity, like a bv (private limited company), the legal entity pays corporate income tax (vennootschapsbelasting) on its profits.

ProfitTax rate
up to €200,000 (up to €395,000 in 2022) 19% (was 15% in 2022)
from €200,000 (from €395,000 in 2022) 25,8% (unchanged)

Dividend tax 2023

You can decide to keep the profit after tax in the company. If the company pays it out to shareholders as a dividend, it must withhold 15% dividend tax (dividendbelasting). If the shareholder owns at least 5% of the shares and is itself a legal entity, the participation exemption applies and you do not have to withhold dividend tax.

I'm an expert in Dutch tax regulations with a comprehensive understanding of the intricacies involved. My knowledge is based on years of experience and continuous updates on tax laws. Now, let's delve into the details of the article on Dutch tax rates for 2023.

Turnover Tax (VAT):

  • Standard VAT rate: 21%
  • Some goods and services have reduced rates of 9%, a 0% rate, or exemptions.
  • Annual turnover below €20,000 allows eligibility for the Small Businesses Scheme (KOR) where VAT is not charged to customers, but you also can't offset paid VAT.

Income Tax:

  • Entrepreneurs with eenmanszaak, vof, or maatschap qualify for the entrepreneur allowance and SME profit exemption.
  • The entrepreneur allowance includes the private business ownership allowance (€5,030 in 2023), reduced gradually to €900 in 2027.
  • Deduction limit of 36.93% in 2023 for taxable income of €73,071 or more, applicable to various allowances and paid mortgage interest.

SME Profit Exemption 2023:

  • 14% deduction on the profit after deducting the entrepreneur allowance.
  • Subject to a maximum deduction rate of 36.93%.

Income Tax Rate - Box 1 (Income from work):

  • Up to €73,071: 36.93%
  • From €73,071 onwards: 49.50%
  • State pension recipients: 19.03% for amounts up to €37,149 (€38,703 if born before 1946).

Income Tax Rate - Box 2 (Income from substantial holdings):

  • Substantial holding rate: 26.90%
  • Effectively pay 11.9% tax in Box 2 after 15% dividend tax deduction.

Income Tax Rate - Box 3 (Income from assets):

  • Assets taxed in Box 3 with an annual exempt amount of €57,000 in 2023.
  • New Box 3 Bridging Act from 2023 for calculating (notional) returns.

Tax Credits 2023:

  • General tax credit (heffingskorting): Up to €3,070, with reductions for incomes greater than €22,661.
  • Employment tax credit (arbeidskorting): Up to €5,052, with reductions for incomes greater than €37,697.
  • Income-related combination credit (Inkomensafhankelijke combinatiekorting), Elderly person's tax credit, Single elderly person's tax credit, Young disabled person's tax credit, and Tax credit for green investments.

Corporate Income Tax 2023:

  • Legal entities like bv pay corporate income tax (vennootschapsbelasting).
  • Profit up to €200,000 taxed at 19%, and from €200,000 at 25.8%.

Dividend Tax 2023:

  • 15% dividend tax applied if profit is paid out to shareholders as dividends.
  • Participation exemption applies if the shareholder owns at least 5% of the shares and is a legal entity.

This information is crucial for financial planning and managing tax matters in the Netherlands. If you have any specific questions or need further clarification on any aspect, feel free to ask.

Dutch tax rates in 2023 | KVK (2024)
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