Taxes and finances in the Netherlands: A guide for emigrants | KOCH Moving Logistics

Moving to the Netherlands is an exciting adventure that offers many new opportunities and experiences. One essential aspect that emigrants must consider is taxes and finances in the Netherlands. This article provides comprehensive information about the Dutch tax system, the best banks and tips for international money transfers for anyone wishing to emigrate to the Netherlands.

The Dutch tax system is characterised by a clear division of income into three so‑called "boxes", which are taxed at different rates. As a general rule: if you are tax‑resident in the Netherlands (by having a domicile or habitual residence), your worldwide income is subject to Dutch taxation.

The Dutch tax system divides income into three categories (Boxes 1 to 3), each taxed independently:

 

– BOX 1 (INCOME FROM WORK AND HOME OWNERSHIP): This includes employment income, business income, other gainful activities, and income from the owner‑occupied home. Taxation is progressive, with a graduated rate structure.

 

– BOX 2 (INCOME FROM A SUBSTANTIAL COMPANY SHAREHOLDIND): If you hold at least 5% of the shares in a corporation, profits from that shareholding (dividends, capital gains) are taxed in this box at a flat rate.

 

– BOX 3 (INCOME FROM SAVINGS AND INVESTMENTS): This is a deemed return on your net assets (e.g., savings, shares, second homes). Taxation is based on a notional percentage return, applied to your asset base.

In the Netherlands, VAT is referred to as "BTW". The standard tax rates are as follows::

 

– 21% (standard rate): Applies to most goods and services.

 

– 9% (reduced rate): Applies to staple foods, certain agricultural products, books, works of art, pharmaceutical products and selected services.

 

– 0% (zero rate): Relevant for intra‑community supplies, exports and certain special cases.

The tax return for individuals is filed electronically with the Belastingdienst (the Dutch tax authority) via the Mijn Belastingdienst portal Mijn Belastingdienst . Access is via a DigiD.

 

– FILING DEADLINE: The tax return for a calendar year is generally due by 1 May of the following year (e.g., return for 2025 by 1 May 2026)..

– EXTENSION: If you engage a tax adviser, an extension to 1 September may usually be requested.

– PAPER FORM: Taxpayers without residence in the Netherlands can use form C in paper form.

A comprehensive double taxation agreement exists between Germany and the Netherlands, which prevents the same income from being taxed twice. The agreement regulates which country has the right to tax which type of income: Residence: The place of habitual residence or domicile is generally decisive. If a person has a residence in both contracting states, special rules apply to determine the state of residence (e.g., centre of vital interests). For types of income, employment income is generally taxed in the state of employment, but may be exempt in the state of residence under certain conditions (such as a short duration of stay).

Opening a Dutch bank account is essential for everyday life. A Citizen Service Number (BSN) is generally required. However, some direct banks such as bunq or Revolut also offer account opening without a BSN or without a fixed address.

As a foreigner, you generally need the following to open an account:

 

– A valid identity card or passport: For identification.

– Proof of residential address: Current registration certificate (e.g., extract from the municipal register) or a rental contract.

– BSN (Bürgerservicenummer): The Dutch tax and social security number.

– Residence permit: If applicable (relevant for non‑EU/EEA citizens).

– Telephone number and email address.

 

Many banks now allow fully digital account opening. In addition to traditional high‑street banks such as ING, Rabobank and ABN AMRO, digital banks such as bunq and Revolut are particularly popular among expats.

As EU members, both countries benefit from the Single Euro Payments Area (SEPA). Transfers in euros within the SEPA area are often free or very cheap and usually arrive within one banking day. For international money transfers, you have the following options:

 

– CLASSIC BANK TRANSFERS (SEPA): Often supported from your existing account. Terms vary depending on your home bank.

 

– DIGITAL PAYMENT SERVICES (E.G., WISE, REVOLUT): These providers offer transparent fees and often better exchange rates. Wise also offers the option of holding balances in multiple currencies, which can be very practical during the moving phase and for frequent transfers between Germany and the Netherlands.

The Dutch pension system is considered one of the best in the world and rests on three pillars:

 

 1ST PILLAR: STATE BASIC PENSION (AOW – ALGEMENE OUDERDOMSWET)

The AOW is a state basic pension to which every resident is entitled. Entitlement accrues at 2% 2 % for each year you live in the Netherlands. The retirement age in 2025 is 67 years and will be raised to 67 years and 3 months in 2028..

 

EFFECT FOR GERMAN EMIGRANTS: If you have not lived the full 50 years in the Netherlands, your state pension will be reduced accordingly. However, contributions from Germany may be creditable under certain conditions.

 

 

2ND PILLAR: OCCUPATIONAL PENSION

Almost 90% of Dutch employers offer an occupational pension scheme , funded jointly by employees and employers. The employer's share is on average between 8% and 16% of the pensionable salary.

 

 

3RD PILLAR: PRIVATE PENSION PROVISION

Private pension products such as the tax‑advantaged annuity(lijfrente) or private investment and savings accounts serve as voluntary supplements.