Dutch tax rates in 2023
- Gé Sletterink
- How to
- 5 Jul 2023
- Edited 20 Jan 2023
- 4 min
- Managing and growing
Dutch tax rates are updated every year. Here you can find an overview of various tax rates in 2023. Use this information for your financial planning and tax matters.
Turnover tax (VAT)
Turnover tax or VAT is the tax you pay on your sales. The standard VAT rate is 21%. You charge VAT to your customer. You can reclaim the VAT you paid on expenses and investments. You remit the difference to the tax authorities, usually quarterly.
Some goods and services are subject to the reduced rate of 9%, the 0% rate, or an exemption. For more information, visit the website of the tax (in Dutch).
If your annual turnover is below €20,000, you qualify to apply for the Small Businesses Scheme (KOR). You will not have to charge VAT to your customers, but cannot offset paid VAT either. Get advice from your bookkeeper, accountant or tax consultant on whether this arrangement works for you.
You pay income tax on your personal income. Entrepreneurs with an eenmanszaak (sole proprietorship), vof (general partnership), or maatschap (partnership) qualify for the entrepreneur allowance (ondernemersaftrek) and SME profit exemption (mkb-winstvrijstelling). This reduces the taxable profit from your business and helps reduce your tax burden.
Did you spend more than 1,225 hours working for your business? That means you meet the hours criterion and are eligible for the entrepreneur allowance. An important part of this deduction is the private business ownership (zelfstandigenaftrek), which is €5,030 in 2023. In 2022, the deduction was €6,310. This amount will be reduced in the coming years to €900 in 2027.
Is your taxable income €73,071 or more? Then you can no longer deduct personal allowances at the rate in the highest tax bracket. The maximum deduction rate is limited to 36.93% in 2023. In 2022, it was 40%. This applies to the entrepreneur allowance, SME profit exemption, personal allowances, and paid mortgage interest. When you fill out the return, the rate is calculated automatically. The deduction limit does not apply to annuity expenses within the annual and reserve margin.
SME profit exemption 2023
On the profit remaining after deducting the entrepreneur allowance, you are allowed to deduct the 14% SME profit . This is also subject to a maximum deduction rate of 36.93%.
Income tax rate
Box 1: Income from work
In box 1, your income from work is taxed in two brackets. This also includes business profits. The 2023 tax brackets are:
|up to € 73,071||36.93% (37.07% in 2022)|
|from € 73,071||49.50% (unchanged)|
A rate of 19.03% applies to state pension recipients for amounts to €37,149 (€38,703 if you were born before 1946).
Box 2: Income from substantial holdings
Do you and your tax partner own at least 5% of the shares or profit shares in a corporation, or voting rights in a coöperatie (cooperative)? Then you have a substantial holding. The profit you receive from a substantial holding is taxed in income tax box 2 at a substantial holding rate of 26.90%. In distributing profits to you, the company has already withheld 15% dividend tax. These rates are the same as in 2022. This dividend tax paid will be deducted from the tax you have to pay in box 2. So you effectively pay 11.9% tax in box 2.
Box 3: Income from assets
Assets, such as savings or a second home, are taxed in income tax box 3. There is an annual exempt amount of €57,000. This is the exempt amount for box 3 in 2023.
How to calculate (notional) returns has been the subject of much debate in recent years. The Box 3 Bridging Act will apply from 2023. This act introduces a new way to calculate income from savings and investments. This new method is based on the actual split between savings and investments. The assumed returns are determined retrospectively and therefore better reflect reality.
The assumed returns are subject to a 32% tax rate. In 2022, it was 31%.
Tax credits 2023
You deduct the tax credits from the calculated income tax in the 3 boxes. Which tax credits you qualify for depends on your personal situation and income.
|Type of credit||Amount|
General tax credit 2023 (heffingskorting), for every taxpayer.
|Up to €3,070 for everyone under the state pension age (€2,874 in 2022).|
For incomes greater than €22,661, the general tax credit is reduced by 6.095% of the difference between the income and the base level credit. For people with an income of €73,031 or more, the general tax credit is €0.00.
|Employment tax credit 2023 (arbeidskorting), for everyone with income from work.||Tot AOW-leeftijd maximaal € 5.052 (€ 4.260 in 2022)|
Up to €5,052 for everyone under the state pension age (€4,260 in 2022).
For incomes greater than €37,697, the labour credit is reduced by 6.51% of the difference between the income and the base level credit. For people with an income of €115,301 or more, the employment tax credit is €0.00.
Income-related combination credit 2023 (Inkomensafhankelijke combinatiekorting), for the parent of a child under 12 years of age, with an income of at least €5,547, without a tax partner or with a lower income than their tax partner.
|Up to €2,694 (€2,534 in 2022).|
For income from labour starting at €5,547, the credit is: 11.45% x (income from labour - €5,547).
Elderly person's tax credit 2023 (ouderenkorting), for taxpayers of state pension age or older, and with a combined income up to €40,888.
|Up to €1,835 (€1,726 in 2022).|
For an aggregate income of €40,888 or more, the elderly tax credit is reduced by 15% of (aggregate income - €40,888).
Single elderly person's tax credit 2023 (Alleenstaandeouderenkorting), for those receiving state pension benefits without a partner.
|€ 478 (€ 449 in 2022)|
Young disabled person's tax credit 2022 (Jonggehandicaptenkorting ), for individuals with Wajong benefits who are not eligible for an elderly person's tax credit.
|€ 771 (€ 771 in 2022)|
Tax credit for green investments 2023 (heffingskorting voor groen beleggingen).
|0.7% of the balance of green investments. Capped at €65,072 per person.|
Corporate income tax 2023
If you are a partner in a legal entity, like a bv (private limited company), the legal entity pays corporate income (vennootschapsbelasting) on its profits.
|up to €200,000 (up to €395,000 in 2022)||19% (was 15% in 2022)|
|from €200,000 (from €395,000 in 2022)||25,8% (unchanged)|
Dividend tax 2023
You can decide to keep the profit after tax in the company. If the company pays it out to shareholders as a dividend, it must withhold 15% dividend (dividendbelasting). If the shareholder owns at least 5% of the shares and is itself a legal entity, the participation exemption applies and you do not have to withhold dividend tax.