DUTCH INCOME TAX

Your Dutch tax position depends on your residency position. Based on your residency status you will either be subject to full taxation or partial taxation for each tax "box".

The Dutch income tax system is divided into three so-called 'boxes': Box 1, Box 2 and Box 3. Each of these three boxes has its own  rules for determining taxable income and its own specific deductions.

After determining your income for each of the three boxes, you are allowed to deduct  so-called personal deductions in all of these three boxes.

After deducting the personal deductions, the taxable income for each Box is taxed at its own separate tax rate.

For Box 1and Box 3, the Dutch income tax rates are progressive; meaning progressively higher tax rates are applied as your earnings reach higher levels. For Box 2  there is a flat tax rate.

After determining your total tax for all three boxes, every taxpayer is eligible for certain tax credits depending on their personal situation.