Tax for businesses in the Netherlands in 2023
- Personal income tax / wage tax
- Corporate income tax
- Dividend tax
- VAT
Furthermore, as a worker in the Netherlands you must normally pay social security contributions. Finally, several types of tax credits and subsidies can decrease the total tax liability of a self-employed person in the Netherlands.
How much tax does a BV pay in the Netherlands?
The amount of tax paid depends on various factors. It is important to differentiate between the taxes the company has to pay and the personal tax the shareholder, director or employee needs to pay.
A simple BV usually pays corporate income tax over its profits and VAT on purchased goods or services. In turn, the person behind the company, is usually liable for wage tax (if employed by the company), tax on substantial interest (if any dividends distributed) and personal income tax on all other income.
Corporate tax in the Netherlands (BV)
| Profit | 2023 | 2024 |
|---|---|---|
| SME tariff | 19% (up to €200.000) | 19% (up to €200.000) |
| Standard tariff | 25,8% (profits exceeding €200.000) | 25,8% (profits exceeding €200.000) |
| Innovation Box | 9% on profits derived from qualifying innovative activities | 9% on profits derived from qualifying innovative activities |
Personal income tax (BV or sole proprietorship)
| Personal Income Tax (IB) | 2023 | 2024 |
|---|---|---|
| Bracket 1 | 36,93% up to €73.031 | 36,97% up to €75.518 |
| Bracket 2 | 49,50% from €73.031 | 49,50% from €75.518 |
Substantial interest tax on dividends (BV)
Dividends received by a shareholders-directors with 5% or more of the shares in a BV in the Netherlands are subject to box 2 income tax. The amount of tax due will depend on the total amount of dividend income and any applicable deductions or credits. Since the effective total tax on dividends is substantially lower than tax on the director-shareholder's salary, the Dutch tax authorities have introduced a mandatory salary. This DGA-salary is set at 51.000 euros in 2023. Generally, if the company is not able to pay for this, it is not forced to pay out such a salary. A decrease of this DGA-salary can be applied for at the Dutch tax authorities.
Important: never pay out dividend before paying out the mandatory DGA-salary.
| Box 2: Substantial Interest | 2022 | 2023 | 2024 |
|---|---|---|---|
| Up to €67.000 | 26,9 % | 26,9 % | 24,5 % |
| Over €67.000 | 26,9 % | 26,9 % | 33 % |
Wage tax for Director-Shareholder (BV)
A shareholder-director with at least 5% of the shares in a BV, will need to pay a DGA-salary of at least 51.000 euros in 2023. You are required to pay both Box 1 personal income tax and social security contributions on your salary. This Box 1 personal income tax rate is determined by your total income and dependents. Depending on your personal circumstances, you may be able to reduce your total liability through deductions or credits available in the Netherlands.
| 2022 | 2023 | |
|---|---|---|
| Gross annual income | 48.000 | 48.000 |
| Personal income tax | - 17.793 | - 17.726 |
| Health insurance contributions | - 2640 | - 2.606 |
| General tax credit | + 1.286 | + 1.526 |
| Labour discount | + 3.595 | + 4.377 |
| Net income | 32.448 | 33.571 |
| Tax burden (incl. healthcare) | 32,4% | 30,1% |
How much tax do I pay as a ZZP / Eenmanszaak in the Netherlands?
A sole proprietorship in the Netherlands is considered to be a "natural person" for tax purposes, and as such, the owner is subject to personal income tax. The exact same principle applies to a general partnership (or VOF in Dutch). In effect, all income left after deduction of costs is taxed annually at the personal income tax rate (see below):
| Personal Income Tax (IB) | 2023 | 2024 |
|---|---|---|
| Bracket 1 | 36,93% up to €73.031 | 36,97% up to €75.518 |
| Bracket 2 | 49,50% from €73.031 | 49,50% from €75.518 |
The amount of tax will depend on the amount of income earned
Subsidies and tax schemes for ZZP
The following tax subsidies are given to entrepreneurs running a sole proprietorship (ZZP) or general partnership:
- Private business ownership allowance (zelfstandigenaftrek)
- Tax relief for new companies (Startersaftrek)
- SME profit exemption (MKB-winstvrijstelling)
- Small businesses scheme (kleineondernemersregeling, KOR). The Kleineondernemersregeling (Small Business Scheme) is a tax-free allowance available to entrepreneurs in the Netherlands. This scheme permits small businesses to withhold 0% tax on their turnover, instead of the normal 21%.
Example: Tax calculation for ZZP
Below is an example of a tax calculation for a small ZZP/eenmanszaak. It includes the relevant deductions, tax subsidies and social security contributions.
| ZZP disposable income calculation example | ||
|---|---|---|
| ZZP revenue minus expenses | 60.000 | 60.000 |
| Private business ownership allowance | - 7.153 | |
| SME profit exemption | - 7.399 | |
| Personal income (box 1) | 45.448 | |
| Tax & Premium National Insurance | 17.784 | |
| General tax credit | -1.682 | |
| Personal income tax due | 11.502 | - 11.502 |
| Income-related social healthcare insurance contribution | -2467 | - 2467 |
| Disposable annual income | € 46.031 |
Tax deductions ZZP / eenmanszaak
As a sole proprietor in the Netherlands, you may be eligible for several deductions that could potentially reduce your tax liability. These deductions include costs related to business operations and investments, professional fees, donations to charities, and expenses related to home-office work. Additionally, you may be able to deduct expenses such as travel costs, insurance premiums, and other business expenses. Your tax bill can be reduced by applying the following deductions.
| Costs | Which part is deductible? | Notes |
|---|---|---|
| Home workspace | 0% (some exceptions apply) | |
| Food, drink, stimulants | A threshold of € 4,600 applies. Instead of this threshold, entrepreneurs working as sole proprietor or in a partnership are allowed to deduct 80% of these costs and entrepreneurs for corporation tax (bv) 73.5%. | The item 'food' includes business lunches and dinners (including tips). Think of 'drink' to coffee, tea, milk and soft drinks. With 'stimulants' you should think of, among other things, cigarettes and cigars. |
| Representation, congresses, seminars, study trips (including travel and accommodation costs) | Instead of this threshold, entrepreneurs working as sole proprietor or in a partnership are allowed to deduct 80% of these costs and entrepreneurs for corporation tax (bv) 73.5%. | 'Representation' includes the costs of receptions. Promotional gifts also generally fall under 'representation' You may deduct a maximum of € 1,500 for the travel and accommodation costs. Was it necessary for your work to attend a conference and the like? Then this maximum does not apply. |
| Telephone subscription at home | 0% | |
| Business phone calls at home | 100% | |
| General literature | 0% | |
| Professional literature | 100% | |
| Workwear | 100% | Work clothing is clothing that you can wear (almost) exclusively within the framework of your company. This must be evident from the appearance of the clothing, for example: a uniform or overall. Is the clothing also suitable for wearing outside of your company? The clothing must then be provided with a logo with a surface area of at least 70 cm2. The logo must refer to your company. |
| Clothing (no work clothes) | 0% | |
| Personal care | 0% | |
| Briefcases and similar | 100% | |
| Equipment and instruments that do not belong to the business assets | 0% | |
| Moving | Limited | |
| Double housing | Limited | |
| Fines | 0% | |
| Company car | Limited | |
| Business costs of private car | A fixed amount of € 0.19 per kilometer. | |
| Business travel costs public transport, taxi and plane | 100% of the costs actually incurred | You must be able to prove that you actually incurred these costs. For example, save your train ticket. Are you traveling with an OV chip card? Then make a print out of your journeys. |
| Vessels for representative purposes | 0% |
Example BV: How much tax will I pay?
To give you a rough estimate you can use the following example:
Business X BV is owned by Mr. Y. He is the 100 percent shareholder and also the managing director.
X BV has a revenue of €250.000. The costs excluding salaries are €100.000.
Mr. Y would like to receive around €50.000 in net income. The minimum director/major-shareholder salary (DGA-salaris) he has to pay is set at €51.000. The shareholder/director in X BV is normally forced to pay out a salary. This is only the case if there are sufficient funds in the company.
Mr. Y decides to pay out the minimum amount of €51.000 in salary. This will be taxed at the progressive income tax rate:
| Personal Income Tax (IB) | 2023 | 2024 |
|---|---|---|
| Bracket 1 | 36,93% up to €73.031 | 36,97% up to €75.518 |
| Bracket 2 | 49,50% from €73.031 | 49,50% from €75.518 |
Including payments for social security and the applicable deductions, Mr. Y will keep roughly €32.000 of that €47.000 after tax.
Meanwhile the company has, after general costs and Mr. Y's salary, €103.000 in profit before tax. First of all, X BV will pay corporate income tax at the following rate.
| Profit | 2023 | 2024 |
|---|---|---|
| SME tariff | 19% (up to €200.000) | 19% (up to €200.000) |
| Standard tariff | 25,8% (profits exceeding €200.000) | 25,8% (profits exceeding €200.000) |
| Innovation Box | 9% on profits derived from qualifying innovative activities | 9% on profits derived from qualifying innovative activities |
In this scenario, the business has to pay 15 percent in corporate income tax, so roughly €16.000. Meaning X BV has €87.000 in net profit.
Mr. Y would like to receive a total disposable income of roughly €50.000. The remainder on top of the mandatory major-director/shareholder salary can be paid out as dividend instead of salary. This is taxed at the so-called substantial interest tax in box 2 of the Dutch tax system.
| Box 2: Substantial Interest | 2022 | 2023 | 2024 |
|---|---|---|---|
| Up to €67.000 | 26,9 % | 26,9 % | 24,5 % |
| Over €67.000 | 26,9 % | 26,9 % | 33 % |
This means he should pay out an additional +/- €25.000 of the profits as dividend to himself to add another €18.000 in net income. This makes his total net income roughly €50.000.
Conclusion:
X BV pays €16.000 in corporate income tax over a €103.000 profit. Besides that the BV usually incurs employer/wage costs which will not be discussed here.
In our example Mr. Y received a pre-tax income of €72.000 consisting of salary and dividend. He pays around €15.000 in personal income tax and €7.000 in substantial interest tax to receive a pre-tax income of net income of €50.000.
