Dutch Tax System and Taxes in short
As any other countries, the taxes are very complicated subject with many different cases. The Dutch Tax institution is called Belastingdients. Whether you're a Dutch citizen or an expat, you are required to pay taxes if you earn money while living in the Netherlands. This Dutch Tax system explanation is based on an average working student, however if you have your own company, car, house and etc. the tax rate is changing. The Netherlands can take more than 50% of your salary for taxes. Your personal situation (type of work, partner’s work status, residency status and other assets and earnings – particularly from abroad) will affect your tax status. You may be filing a tax return in your home country and so will have to deal with double taxation agreements. The Dutch fiscal year runs from January 1 to December 31. In January you will receive a letter (aangiftebrief) from the Belastingdienst asking you to complete a tax return for the previous year. Beginning in February, the tax authorities mail notices to submit your income tax return, which generally has to be submitted before April 1st.
Income taxes and Tax return
The bad news about paying your taxes usually starts with a blue envelop that you receive over the post. If you earn money or you are working in the Netherlands, then you need to pay tax on your income. You declare your income tax via your annual tax return (aangifte inkomstenbelasting) which can be done online through the website of Belastingdienst. In order to fill in the form only you will need to apply for DigiD.
To fill in the online form, you need a document which overviews all your annual earnings (jaaropgave) from your employer. The time period for submitting your annual income tax return is from March 1 to April 30.
It might be slightly complicated to do yourself the taxes if you do not know any Dutch. However, the wijkteam can help you through the process of filling in your data into the system. Keep in mind that tax officers are not allowed to speak English on the phone!
Usually students do not earn that much so most of the time they are getting some tax return. However, if you have 2 jobs in the same time, the student needs to pay the second job taxes. Therefore, it is essential that the person notifies his/her employee of having two jobs in the same time.
What happens if you do not pay your tax is that the tax inspector will send you mails continuously for one year and after that fines will start accumulating until you pay your taxes.
Payroll tax (loonheffing)
Payroll tax is tax and other contributions that are withheld from an employee’s salary by the employer, which saves the employee from having to pay them later as income tax. The payroll tax levy is made up of tax on your salary (wage tax or loonbelasting) and national insurance contributions for pensions, unemployment allowance and other Dutch benefits and allowances. Your payroll tax is deducted from your salary every month. It's important for expats to keep the deduction in mind when discussing salary and employment contract terms for a new job.
Check your tax
You can check you tax here by inputting your data.