Dutch income tax is deducted at source and looks settled, which is why so many newcomers never file a return and never find out they were owed money.
This guide gives the 2026 rates and thresholds, the credits and reliefs that actually move the number, and the two filing situations that are specific to arriving or leaving mid-year.
The Three Boxes
Dutch tax splits income into three boxes that are calculated separately and cannot be netted against each other, which is the structural point most foreign taxpayers miss.
Box 1 is employment, self-employment, pensions and the owner-occupied home.
Box 2 is income from a substantial holding -- 5 per cent or more -- in a company.
Box 3 is savings and investments, taxed on a deemed return rather than on what they actually earned.
Box 1 Rates For 2026
Three brackets apply below state pension age: 35.75 per cent on the first €38,883, 37.56 per cent from there to €78,426, and 49.50 per cent above that.
The first bracket rate is mostly not income tax at all: 27.65 per cent of it is national insurance funding the AOW pension, the Anw survivor benefit and long-term care, which is why the jump to the second bracket is so much smaller than it looks.
People over state pension age pay no AOW component and so face a much lower first-bracket rate.
Two credits then come off the calculated tax rather than off income, which makes them worth more than a deduction of the same size.
The algemene heffingskorting is up to €3,115 in 2026 and the arbeidskorting up to €5,685, both under state pension age, and both taper away as income rises.
Box 3: Taxed On What You Are Assumed To Have Earned
Box 3 charges 36 per cent on a deemed return, with a tax-free allowance of €59,357 per person -- so a couple filing together shelters nearly €119,000 before anything is due.
The deemed returns for 2026 are 1.28 per cent on bank deposits, 6.0 per cent on other assets such as shares, funds and second properties, and 2.70 per cent on debts, which are deducted.
The gap between 1.28 and 6.0 is the whole game: cash is barely taxed and an investment portfolio is taxed as though it returned 6 per cent whether it did or not.
Assets are measured on 1 January, so the composition of your balance sheet on New Year’s Day determines the whole year’s bill.
Where your actual return was lower than the deemed one, there is a counter-evidence route to be assessed on the real figure instead, and it is worth using in a year the market fell.
Box 2 And Company Income
A substantial interest of 5 per cent or more puts dividends and share gains in Box 2, taxed at 24.5 per cent up to €68,843 and 31 per cent above it.
The company itself pays corporation tax first, at 19 per cent on the first €200,000 of profit and 25.8 per cent above, so the combined burden is what matters when comparing a BV with a sole trader.
The company setup guide works that comparison through.
The 30 Per Cent Ruling, Briefly
If you were recruited from abroad and meet a specific-expertise test, up to 30 per cent of your salary can be paid free of tax for a maximum of five years.
The 2026 salary thresholds are €48,013 taxable, or €36,497 for people under 30 with a qualifying master’s degree, and there is a cap on the salary the exemption may be applied to of about €262,000.
From 1 January 2027 the exemption falls to 27 per cent for new cases, with transitional protection for people who already held the ruling in 2024.
Apply within four months of starting work and the relief is backdated to day one; apply later and it starts from the month after the decision.
The full guide to the ruling covers the conditions and the partial non-resident election.
VAT And The Self-Employed
Standard VAT is 21 per cent, with a 9 per cent reduced rate for food, books, medicines, public transport and a set list of services, and a zero rate or exemption for some categories including certain financial, medical and educational supplies.
Self-employed people file BTW returns quarterly, and the small business exemption applies below €20,000 of turnover in both the current and preceding calendar year.
The self-employed deduction is €1,200 in 2026, down from €2,470, with the SME profit exemption at 12.70 per cent of what remains -- see the ZZP setup guide.
Filing: What Actually Applies To You
The annual return covers the calendar year and is due by 1 May, with an extension available on request and normally granted.
You file at Mijn Belastingdienst with DigiD, and most of the form arrives pre-populated with salary, mortgage interest and bank balances already filled in.
In the year you arrive or leave you file an M-form instead, covering a partial year of residence, and it cannot be filed online in the same way.
It is also the return most likely to produce a refund, because the tax credits and the bracket thresholds are applied to a full year of allowances against a partial year of income.
Employees whose situation is simple are often not required to file at all, and this is precisely when it is worth filing anyway.
Americans keep filing US returns regardless, and the treaty plus the foreign tax credit generally prevents double taxation on the same income -- though not on self-employment tax, which is dealt with separately in the social insurance guide.
Frequently Asked Questions
What are the 2026 income tax rates?
35.75 per cent to €38,883, 37.56 per cent to €78,426 and 49.50 per cent above, below state pension age.
Roughly 27.65 points of the first bracket is national insurance rather than income tax.
How much can I hold before Box 3 tax?
€59,357 per person in 2026, so about €118,700 for a couple filing together.
Above that, 36 per cent is charged on a deemed return of 1.28 per cent for cash and 6.0 per cent for investments.
When is the return due?
1 May for the preceding calendar year, with an extension available on request.
Assessments usually follow within a few months for a straightforward filing.
What is the M-form?
The return for the year you become or cease to be a Dutch resident, covering a part-year.
It frequently produces a refund, because a full year’s credits are set against a partial year’s income.
Do I have to file if tax was deducted from my salary?
Often not, but you usually should, since deductions for mortgage interest, study costs, healthcare expenses and charitable gifts are only claimed through a return.
What changes for the 30 per cent ruling?
The exemption drops from 30 to 27 per cent from 1 January 2027, with the 2026 salary thresholds at €48,013, or €36,497 for under-30s with a qualifying master’s.
People who already held the ruling in 2024 keep the old percentage and the old salary criteria.
