Starting your own business in the Netherlands

Do you fall under temporary protection? Then you may work in the Netherlands under certain strict conditions to start your own business. Read here how that works.

Source: PXhere

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Paying taxes if you are a business owner in the Netherlands

Last updated: 25/09/2024, 11:26

If you are a business owner in the Netherlands, you have to pay taxes. Every 3 months you have to file a tax return. As a business owner, you pay tax on your profit and on your turnover.

You pay VAT to the Dutch tax authorities

As a business owner, you are required to pay VAT. This is called

btw

in the Netherlands. You add this tax to the price of the product or service you sell. This usually involves 9 or 21 percent VAT on top of the price of your product. You must pay the VAT you receive from your clients to the

Tax Administration

You can deduct the VAT you paid to suppliers. So you pay VAT on the difference between your purchase price (including expenses) and selling price.

You file tax returns every 3 months

You must file a tax return with the Tax Administration every 3 months. You do this in the tax portal on their website. How you log in depends on your situation:

You are self-employed: you log in with your
DigiD
.
You have a company that is a legal entity, such as a private limited company: you use
Eherkenning
to log in.

You can also employ an accountant or bookkeeper to do the VAT return for you. Agree the cost of this in advance with your accountant or bookkeeper.

It is mandatory to file a tax return every 3 months, even if your income is € 0. If you do not file your tax return, you could receive a high fine from the Tax Administration. The Tax Administration will then make an estimate of your income and the tax you have to pay.

You report each year how much profit you made

As a business owner, you must file an annual tax return of your company's profits. The Dutch Tax Administration uses this to calculate how much

income tax

and

income-dependent healthcare contribution

you have to pay. You pay this in the following year. You can file the tax return in the tax portal using your DigiD to log in.

The

annual tax return

is complicated because of the many tax rules. If you do not fill out this tax return properly, you might run into problems. You may not pay enough tax or you may pay too much tax.

You can also employ an accountant or bookkeeper to do the annual tax return for you. Agree the cost of this tax return in advance with your accountant or bookkeeper.

You can combine self-employed work with salaried employment

You can work in salaried employment and have your own business at the same time. You must then file tax returns for both jobs.

In the Netherlands, you must work at least 1,225 hours a year in your own business to deduct certain expenses from your taxes. These are the deductions. You must be able to prove that you worked 1,225 hours.

If you do not do this, you will miss out on many financial benefits. If you are in this situation, you can contact the tax information line or stop by a tax information point for more information. You can also contact an accountant or bookkeeper.

The Dutch Tax Administration

More information about doing business in the Netherlands can be found on the Dutch Tax Administration website.

More information