Should I pay something again? Types of taxes in the Netherlands
The topic of taxes is not easy, especially in a new country, where all the basic information is in a foreign language. Finding up-to-date information in English is not so easy to find. Therefore, here we have collected for you tax information from the Netherlands with explanations and examples.
There are different approaches to tax classification, for example, they can be divided according to who pays them: individuals, private entrepreneurs or legal entities. Or by the one who charges these taxes: the tax office or your municipality. In this article we will adhere to the second principle, not forgetting to mention for whom these taxes are relevant.
Some taxes are tied to a specific person, for example, all working residents of the Netherlands must pay income tax. And there are those that are paid under a certain condition. A car tax is paid only if you have a car, a dog tax is paid if you have a dog (and if your municipality has introduced this tax).
There are permanent taxes, and there are those that you pay one-time, for example, a tax on the purchase of a car or real estate.
What types of taxes exist?
So, taxes can be charged directly by the tax service (belastingdienst) or the municipality (gemeente). Moreover, for the first type of taxes, the state determines all conditions: strict rates and rules for payment. It is spelled out directly in the law. Local taxes may vary in different municipalities. This is because the law stipulates only the presence of the tax itself, but not its amount.
National taxes (belastingdienst)
National taxes (which belastingdienst sends) include income tax, profit tax, VAT, dividend tax, excise tax, advertising tax, and a few other small taxes. The rates of these taxes are set one for all and their payment is obligatory for everyone to whom this tax applies. If you have income, you pay income tax; if you have sales, you pay VAT and so on.
Municipal taxes (gemeente)
Local taxes include real estate tax (OZB – onroerendezaakbelasting), land improvement taxes (garbage collection, sewage, lawn mowing on the public territory of the municipality). These taxes go to the budget of the municipality and it distributes them. Somewhere taxes are higher, but maybe that’s why it’s cleaner there.
The same applies to the dogs’ tax. This money can be used for garbage cans installation, where you can throw away what you cleaned after your dog. These garbage cans are also cleaned with the same money usually. If such a tax is not charged in your municipality, then it just been doing with the municipality’s money.
We will write more about each type of tax separately. Here we will mention several non-trivial taxes, which are useful to know about.
There is such an interesting and important national tax as waterschapbelasting to keep all canals clean (its amount varies from municipality to municipality). It was introduced a long time ago because floods regularly occurred in the country. Then people decided that everyone should take care of common security. And since 1953, when there was the last serious flood, this never happened again. So, as we can see, taxpayer money is clearly being spent for the good of society. This tax is calculated depending on the size of the housing in which you live (as well as real estate tax). The payer is not the owner, but the person who lives at this address (registered there).
Other taxes, which you will probably see, are taxes on garbage removal and riool (sewage), calculated by the municipality and calculated on the number of people registered in the house.
Another important motorrijtuigenbelasting (wegenbelasting) tax is the road tax. Applicable to those who have a car. It is a local tax. It has a minimum and a maximum and the municipality calculates it based on its expenses for road maintenance. Therefore, it is usually higher in big cities, since there is more load on the roads. In addition, its amount depends on the type of vehicle and fuel used.
When and how to pay different types of taxes?
Income tax is paid once a year after filing a tax return. It must be submitted before April 30. After that, the tax authorities process the information and you receive a decision (aanslag). Once the decision has come, you have 6 weeks to pay the tax. You can also pay it in advance (during the current year), if you know that this year you will need to pay a lot. This is done by submitting an advance tax report.
If it is difficult for you to pay the full amount right away, it is possible to get an installment plan. They usually approve it for 4 months. If you want it for a longer period, you need to prove that it is really beyond your ability to pay within 4 months. If you have such a need, Nalog.nl will be happy to help you.
VAT is only paid by entrepreneurs; they usually pay it quarterly within a month after the end of the reporting period. The same goes for loonheffing (payroll tax). This is not a final tax, but an advance part of income tax. The company pays it, withholding part of the money from its employees (all social insurance is included here).
Legal entities pay profit tax, they pay it once a year, in case of this tax, advance payments are also available. The deadlines for filing a tax return and tax are approximately the same as for income tax. However, in the case of income tax, the declaration should be filed before June 1. Deferral of payment is also possible.
Local taxes are received at the beginning of the year, in February, after the municipality recounts the number of registered people and approves the WOZ-waarde (cadastral value) of the house, as some taxes are calculated based on the cadastral value.
They can be paid by dividing the amount into two parts and paying the first part in March, and the second at the end of April. In addition, you can submit a request for a monthly payment, this is possible if the automatic billing is set up. It can be convenient, since you do not pay a large amount right away but pay small fees once a month. This payment method will be automatically extended to the next year, and so on, until you submit a separate request to stop automatic debit.
You can avoid paying most of the municipality taxes if you are completely constrained in the means. This is called kwijtschelding. You can request such exemption by contacting the municipality directly.
A road tax (motorrijtuigenbelasting / wegenbelasting) is paid monthly but is calculated every three months based on the type of fuel, weight and type of car. It can be calculated here (https://www.wegenbelasting.nl).
You can check the conditions of the dog tax in your municipality. In theory, you are required to pay this tax, but the municipality, of course, does not go around the yards and counts dogs. It requests information from veterinarians, and if you got a dog at the end of the year and did not have time to register it with a veterinarian, then you can start paying this tax from next year.
In general, until the municipality has sent you a letter that you have to pay something, you don’t need to pay, there are no fines for that. They can only accrue tax for the past year. This may be important for those who have recently arrived and did not know about some type of taxes.
Customs levies taxes on the import of goods, this is no longer called a tax, but an import duty. The list of goods subject to duty is quite large. It is important to be careful when you buy something from abroad NL, something that comes in the form of a parcel. It may turn out that you buy cheap goods on aliexpress or on amazon, and then pay more for the import.
Goods from the EU can be imported without tax. You only need to pay VAT to the seller of the goods. If the goods were bought not in the EU countries and its value is above 22 euros, then maybe you will be subject to import duties and possibly even VAT.
In addition, there are some small taxes that are already included in the cost of goods and services. For example, taxes on aircraft, insurance, etc. They have already been included in the price of the service, so we don’t even think about them. For example, gasoline in the Netherlands is more expensive than in Germany, because the excise tax is higher.
To determine what type of tax you received, first look at who the sender is (tax authorities / municipality). If it is from the tax authorities, the type of this tax is always written on the top right. If it is a municipal tax, for example motorrijtuigenbelasting, then this is related to the car and then check the indicated car number.
If you received a letter with tax or a fine:
- Check that this letter is valid for you.
- Check what kind of tax or fine it is.
- Then try to solve it according to our instructions or find a competent consultant and entrust the matter to him.
If you think that the tax or penalty has been accrued unfairly. Or you can’t figure out what type of tax is it. Contact us and we will help you to deal with this and, if necessary, challenge the tax decision. To be able to help, we need photos of the entire letter from all sides.
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