Tax rates

Income tax

The Dutch income tax system has three categories of taxable income with their own rates; 

• box 1 taxable income from work and dwellings;
• box 2 taxable income from substantial interest;
• box 3 taxable income from savings and investments.

The income tax payable is the aggregate amount of the tax on the taxable income in the three boxes.

The tax on taxable income for income from work and dwellings (box 1) for the fiscal year 2012 is:

• The first bracket: 33% on the first € 18,945. This rate comprises of 1.95% tax and 31.15% security contributions;
• the second bracket: 41,95% on the next € 14,918. This rate comprises of 10,80% tax and 31.15% social security contributions;
• the third bracket: 42% tax on the next € 22,628;
• the fourth bracket: 52% tax on the excess income.

This will give the following table:

Taxable income above	but not more than	rate including social security contributions
€ --	€ 18,945	33.10%
€ 18,945	€ 33,863	41.95%
€ 33,863	€ 56,491	42%
€ 56,491	€ --	52%

Taxable income from substantial interest (box 2) is taxed at a flat rate of 25%.

Taxable income from savings and investments (box 3) is taxed at a flat rate of 30% of a deemed return on investment of 4%. There is a tax-free amount of € 21,139. This results in taxation of 1.2% of your total equity above the threshold of € 21,139.


Corporate income tax

The Dutch corporate income tax rates in 2012 are as follows: 

Profit till € 200,000:	20%
Above € 200,000 profit:	25%

 
Inheritance and gift tax

Inheritance and gift tax are levied on the value of everything that is received by someone who lived in the Netherlands at the time of the transfer or the received is located in the Netherlands, like real estate.

The tax rates in 2012 are as follows: 
 

Received:	When inherited or received by:
	1. Partners and children	1A. Grandchildren	2. Other recipients
0 till € 115,708	10%	18%	30%
€ 115,708 and more	20%	36%	40%

The exemptions for the inheritance tax for 2012 are:

Partners	€ 603,600
Sick of handicapped children	€ 57,342
Children and grandchildren	€ 19,114
Parents	€ 45,270
Other recipients	€ 2,012

The exemptions for the gift tax for 2012 are:

Children	€ 5,030
Children aged 18 till 35 (once)	€ 24,144
additional for study or housing	€ 26,156
Other recipients	€ 2,012

VAT:

The Dutch VAT rates for 2012 are:

• 0% for international activities, like transferring goods outside of the European Union.
• 6% for certain activities, like food, drinks and medicines.
• 19% for all other VAT taxable activities.

Please note there are also activities that are exempt of VAT.