Dutch tax & pension

dutch tax system

Box 1 - work & home: salary, wages, business income (self-employed), benefits, income related to primary residence

• progressive tax rates
• two? brackets
• includes social security contributions: AOW, Anw, WLZ
• deductions: mortgate interest, work-related tax credits, general tax credit, healthcare tax credit
  • loonheffingskorting
  • arbeidskorting
• https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/prive/inkomstenbelasting/heffingskortingen_boxen_tarieven/boxen_en_tarieven/box_1/box_1

Box 2 - substantial interest: own ≥5% shares in private company (BV)

• tax on dividends, capital gains from selling shares
• flat rate (26-27%?)

Box 3 - savings & investments: savings accounts, investments (stocks, ETFs), second homes, crypto, minus debts

• government assumes fictional (deemed) return, you are taxed on that assumed return
• tax-free allowance: https://www.belastingdienst.nl/wps/wcm/connect/nl/box-3/content/heffingsvrij-vermogen
• rates depend on asset type

Employer automatically withholds income tax:

• old-age pension (AOW)
• survivor benefits (Anw)
• long-term care (WLZ)

If your net worth is above the tax-free bracket of box 3, it may be worth it to start a BV that does investments, e.g. via Ligo.

dutch pension

3 pillars:

• AOW (state pension)
  • basic pension, flat amount
  • build up each year you live/work in NL
  • full AOW is 50 years
  • each year, 2%
• Occupational pension (via employer)
  • invested over working life
  • defined contribution
• Private pension/individual savings