Practical Advice: The Tax Authority
Taxation in the Netherlands
When you come to the Netherlands as a non-working student, you are not required to pay taxes. However, once you graduate and begin working – or get a part-time job to go along with your study – you will have to start paying your dues. The taxation system in the Netherlands can be regarded as straightforward in comparison to other places; you can even pay them via the iDEAL e-commerce payment system. However, at the same time, they are often much higher than in other countries. This is to make sure that public infrastructure receives the funding it needs to uphold a good quality of life for residents. To learn about the Dutch taxation plan for 2023, you can follow this link for a simple overview, or this link for in-depth information.
In order to pay your taxes, you will have to apply for a DigiD, which is a form of identification used for making online arrangements with the government. To apply for a DigiD, you will need your Citizen Service number, or Burgerservicenummer (BSN), which you will have received when you registered with your municipality. If you have forgotten your BSN, you can directly ask the municipality in which you are registered to provide this information to you.
Types of taxes
Taxes in the Netherlands are organised and collected by the Belastingdienst (translation: Tax Authority). The major forms of taxes for individuals in the Netherlands are income tax and various taxes which are used to maintain the municipality. There is also the value-added tax (VAT), which varies based on different factors and is included in the price of products and services you purchase. Additionally there is a corporate tax, but this is for businesses and not individual people.
When it comes to income tax, there are two ways the government can collect your money. If you are an employee of a company, your company will usually pay the income tax for you, deducting it from your monthly income. If you are a self-employed person or business owner, you will have to pay your income tax directly in the annual tax form, which you can do via the DigiD portal. You can estimate the amount of income tax you will pay via this website. Be sure to declare foreign assets and income to the tax authorities as well. It is important to do this in addition to reporting your overseas tax arrangement to avoid both charges of tax evasion as well as possibly getting a double tax on your income. To learn about foreign income and tax deductions in the Netherlands, you can follow this link.
When it comes to municipal taxes, such as for sewage or waste collection, these are usually sent to you via post as well as via the DigiD online portal. Only working people pay these kinds of taxes, so if you are a non-working student, you should not have to pay these.
It is not uncommon for the Belastingdienst to ask for money that you may not be compelled to pay if you are a student or have very low income, for example. This can happen for various reasons, such as an administrative error. If you need advice on whether you really have to pay what is requested of you, you can contact the government tax advice services. If you want to contest a tax levied at you, you may write a (very polite) letter to the tax services of the municipality you are registered in asking them to lower the tax. It helps to physically sign your name at the bottom of any letter you write to the government. To find out what information you must include in your objection letter, you can follow this link. You can also apply for a remission which can waive fees for low-income people. Remember to contact the Belastingdienst as soon as possible after you receive such fees.
by Olivia Nelson