Dutch tax rates in 2025

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 Netherlands Tax Administration, 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 Netherlands Tax Administration.

Small businesses scheme KOR

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

Do you supply customers in other EU countries and is your total turnover less than €100,000? Then you may be able to make use of the EU-KOR. The EU-KOR came into effect on 1 January 2025. Get advice from your bookkeeper, accountant, or tax adviser on whether the EU-KOR is of interest to you.

Income tax 2025

You pay income tax on your personal income. Entrepreneurs with an eenmanszaak (sole proprietorship), VOF (general partnership), or maatschap (professional 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.

Income tax rates

The various forms of personal income are taxed in separate boxes in income tax.

Box 1: income from wages and property

In box 1, you pay tax on your income from wages and property in 3 brackets. Profit from business is also part of this. For the year 2025, the former first bracket has been split into 2 parts. The tax brackets for 2025 are:

A rate of 19.07% applies to state pension recipients for amounts up to €38,441.

Entrepreneur allowance 2025

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 €2,470 in 2025. In 2024 it was €3,750. This amount will be reduced in the coming years to €900 in 2027.

Is your taxable income €76,8178 or more? Then you cannot use the rate of the highest tax bracket for personal deductions. The maximum rate for deductions in 2025 is 37.48%, the rate of the second bracket. 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 2025

You are allowed to deduct the 12.70% SME profit exemption from the profit remaining after deducting the entrepreneur allowance. This was 13.31% in 2024. This exemption is also subject to a maximum deduction rate of 37.48%.

Box 2: income from a substantial business interest

Do you and your tax partner own at least 5% of the shares or profit-shares in a partnership, or voting rights in a coöperatie (cooperative)? Then you have a substantial business interest. The profit you receive from substantial interest is taxed in income tax box 2.
In 2025, there are 2 brackets:

When distributing profits, the company withholds 15% dividend tax. That rate is the same as 2024. The dividend tax already paid will be deducted from the tax payable by you in box 2.

Box 3: income from savings and investments

Assets, such as savings or a second home, are taxed in income tax box 3. There is an annual exempt amount of €57,684 per person. This is the exempt amount for box 3 in 2025. The 2025 tax rate in box 3 is 36%. That is the same as 2024.

How to calculate (notional) returns has been the subject of much debate in recent years. Since 2023, the Box 3 Bridging Act applies. 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. For other assets, a rate of return of 5.88% applies in 2025. This was 6.04% in 2024.

A Supreme Court ruling will soon allow you to prove that your actual return was lower than the notional return. A process for this will begin in summer 2025. If you meet the conditions and qualify, you will receive a form from the Tax Administration.

Tax credits 2025

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. In 2025, your aggregated income from boxes 1, 2, and 3 will count towards the general tax credit. Before 2025, only the income in box 1 counted. For the other tax credits, only income from box 1 counts.

Corporate income tax 2025

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.

Dividend tax 2025

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.

Excessive borrowing

Directors of a legal entity with 5% or more of the shares in that legal entity are director-major shareholders (DGAs). These are usually managing directors of a BV. Does a DGA have a private debt with their own private limited company of more than €500,000 (same as in 2024)? Then the DGA must pay tax in box 2 of income tax on the part above that limit. The debt level on 31 December is the reference moment for the tax payable.

Customary salary for DGA

A director-major shareholder is also an employee of the legal entity, usually a BV. For this, the DGA must receive a wage that is customary for the activities. In 2025, this customary wage is at least the highest of the following 3 amounts:

• The salary of an employee in the most comparable employment.
• The salary of the highest earning employee of the BV or of an affiliated company.
• €56,000 (same as 2024).

Income-related healthcare insurance contribution

Besides the basic monthly health insurance premium, there is also an income-dependent health insurance contribution. For employed persons, the employer pays this premium. Self-employed people pay the reduced income-dependent contribution via an assessment from the Tax Administration.

Legal minimum hourly wage

From 1 January 2025, the minimum wage for employees aged 21 and over will be €14,06 per hour (was €13,68 in 2024). 

The minimum youth wages as of 1 January 2025 are:

Volunteers allowance 2025

You can pay untaxed compensation for voluntary work. This volunteer allowance cannot exceed the maximum amounts per hour, per month, and per year.

Travel allowance

The untaxed mileage allowance for business travel expenses using own transport will remain €0.23 per kilometre in 2025. This amount also applies to commuting expenses.

Home-working allowance

Employees who work from home can receive an untaxed allowance of €2.40 per day worked from home. In 2024, this was €2.35.