Dutch tax rates in 2024

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 Administration (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 2024

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.

Box 1: income from employment

In box 1, you pay tax on your income from employment in two brackets. Profit from business is also part of this. The tax brackets for 2024 are:

A rate of 19.07% applies to state pension recipients for amounts up to €38,098 (€40,021 if you were born before 1946).

Entrepreneur allowance 2024

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 €3,750 in 2024. In 2023, the deduction was €5,730. This amount will be reduced in the coming years to €900 in 2027.

Is your taxable income €75,518 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 36.97% in 2024. 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 2024

On the profit remaining after deducting the entrepreneur allowance, you are allowed to deduct the 13.31% SME profit exemption. That was 14% in 2023. This is also subject to a maximum deduction rate of 36.97%.

Box 2: Income from substantial holdings

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 holding. The profit you receive from substantial interest, you pay tax in box 2 of income tax. In 2023, there was one rate for substantial interest (26.9%). From 2024, there are two brackets:

In distributing profits, the company withholds 15% dividend tax. That rate is equal to 2023. The dividend tax already paid will be deducted from the tax payable by you 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 2024. The 2024 tax rate in box 3 is 36%. In 2023, it was 32%.

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 6.04% applies in 2024. This was 6.17% in 2023.

Tax credits 2024

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 2024, only income in box 1 will count for this.

Corporate income tax 2024

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 2024

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 (DGA). These are usually managing directors of a private limited company. Does a managing director have a private debt with his or her own private limited company of more than € 500,000 (this was € 700,000 in 2023)? Then the DGA has to pay tax in box 2 of income tax on the part above that limit. The debt level on 31 December is the reference point for the tax payable.

Customary salary for DGA

A director-major shareholder is also an employee of the legal entity, usually a private limited company. For this, the DGA must receive a wage that is customary for the activities. In 2024, 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 (was €51,000 in 2023)

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 2024, there is a minimum hourly wage of €13.27 for workers aged 21 and above. Before 2024, there were fixed minimum wages per day, week and month. As the number of hours to be worked could vary by sector, this caused different hourly wages.
From 1 January 2024, the minimum youth wage is:

Volunteer allowance

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