Updated: 21 July 2026.
Income tax in the Netherlands (inkomstenbelasting) depends on the type of income, tax residence, age, family circumstances, home ownership, business activities, investments and other assets. The return is filed with the Dutch Tax and Customs Administration (Belastingdienst) and is used to determine the final amount of tax, national insurance contributions, tax credits and any refund.
Dutch tax residents generally report their worldwide income, including both Dutch and foreign income. This does not automatically result in double taxation: an applicable tax treaty and Dutch tax rules may provide an exemption or a credit for tax paid in another country. Persons living outside the Netherlands generally report only income and assets that are taxable in the Netherlands.
It is important to distinguish between the filing year and the tax year. The return filed by individuals in spring or summer 2026 normally concerns income received in 2025. The 2026 rates apply to income received between 1 January and 31 December 2026 and will be used when filing the 2026 return in 2027.
Taxes for individuals in the Netherlands
In the Netherlands, an individual’s income is divided among three tax categories: Box 1, Box 2 and Box 3. Each category has its own calculation rules, rates, deductions and loss-relief provisions.
Tax residence is not determined solely by registration or nationality. The Belastingdienst assesses the actual circumstances, including where a person permanently lives and works, maintains a household, and where their family and centre of vital interests are located. Nationality alone does not determine whether a person must pay Dutch income tax.
The maximum Box 1 rate in 2026 is 49.50%, but this is not the average or effective rate on all income. Tax is calculated progressively: each portion of income is taxed at the rate applicable to the relevant bracket, after which tax credits and deductions are applied.
Income tax rates for 2025 and 2026
Rates for the 2025 return filed in 2026
For persons who had not yet reached the state pension age (AOW age) in 2025, the following Box 1 rates apply:
- up to and including €38,441: 35.82%;
- over €38,441 up to and including €76,817: 37.48%;
- over €76,817: 49.50%.
For 2025, the Box 2 rate is 24.50% on income up to €67,804 and 31% on the portion above €67,804. The Box 3 rate is 36%, and the tax-free allowance is €57,684 per person or €115,368 for tax partners.
Rates for income received in 2026
For persons who do not reach the AOW age in 2026, the following Box 1 rates apply:
- up to and including €38,883: 35.75%;
- over €38,883 up to and including €78,426: 37.56%;
- over €78,426: 49.50%.
If a taxpayer reaches the AOW age during 2026 or had already reached it at the beginning of the year, the first-bracket rate is calculated differently because the AOW contribution is wholly or partly no longer payable.
Two rates apply in Box 2 for 2026:
- 24.50% on taxable income up to €68,843;
- 31% on the portion above €68,843.
The Box 3 rate in 2026 is 36%. The tax-free allowance is €59,357 per person or €118,714 for tax partners.
Transition to taxation of actual Box 3 returns
As at 21 July 2026, the new permanent Box 3 system based entirely on actual returns has not yet entered into force. The bill provides for a possible transition from 1 January 2028, but the vote in the Senate was postponed pending consideration of an additional bill.
Under the current transitional system, the Belastingdienst first calculates Box 3 using deemed rates of return. Starting with the 2025 return, a taxpayer may report the actual return. If the actual return is lower than the deemed return, the Belastingdienst uses the result that is more favourable to the taxpayer.
Tax credits and deductions in 2026
Tax credits (heffingskortingen) reduce the calculated amount of tax and national insurance contributions. They are not a single fixed tax-free allowance and depend on income, age and personal circumstances.
- General tax credit (algemene heffingskorting). For a person below the AOW age in 2026, the maximum amount is €3,115 where aggregate income does not exceed €29,736. The credit is then gradually reduced and becomes zero at income of €78,427 or more.
- Employment tax credit (arbeidskorting). This applies to income from work. The maximum amount in 2026 is €5,685; the exact amount depends on employment income.
- Income-related combination tax credit for working parents (inkomensafhankelijke combinatiekorting). If the statutory conditions are met, the maximum amount in 2026 is €3,032.
- Owner-occupied home deductions. Subject to the applicable conditions, mortgage interest and certain related costs may reduce Box 1 income. At the same time, an imputed amount for the owner-occupied home, the eigenwoningforfait, is included in the calculation.
- Personal deductions. In certain cases, qualifying medical expenses, donations to recognised organisations and partner maintenance paid may be deductible.
Benefits and payments should not automatically be treated as tax-exempt. Salary, pensions, most social security benefits and partner maintenance received are generally taxable income. Child maintenance received is not taxable.
Taxable income: Box 1, Box 2 and Box 3
Each type of income or asset is allocated to a specific category. The same component cannot be taxed in more than one Box at the same time. Losses are also dealt with under the rules of the relevant category and generally cannot be transferred freely from one Box to another.
- Box 1: income from employment, business activities, periodic payments and an owner-occupied home.
- Box 2: income from a substantial interest in a company.
- Box 3: income from savings, investments and other private assets that do not fall within Box 1 or Box 2.
Box 1: income from work and owner-occupied housing
Box 1 includes, among other things:
- salary and other employment income;
- profits of a sole trader where the activities qualify as a business for income-tax purposes;
- freelance income or other income from independent activities;
- pensions, many benefits, annuity payments and other periodic payments;
- partner maintenance received;
- taxable foreign income;
- income and deductions relating to the main owner-occupied home.
The rate is applied progressively, not to the entire income at once. For example, exceeding the threshold of the third bracket does not mean that all income is taxed at 49.50%.
Box 2: income from a substantial interest
A substantial interest (aanmerkelijk belang) generally exists where an individual, alone or together with their tax partner, directly or indirectly holds at least 5% of the shares, options, profit-sharing rights or capital of a company.
Box 2 taxes:
- regular income, including dividends and other profit distributions;
- disposal income, such as a gain on the sale of shares;
- certain transactions treated as disposals by law, including specific cases involving emigration, restructuring or termination of the interest.
Salary received from one’s own BV or NV does not fall within Box 2; it is generally taxed in Box 1. Dividend tax withheld is, where permitted, credited in the final assessment.
Box 3: savings and investments
Box 3 may include:
- bank and savings accounts in the Netherlands and abroad;
- shares, bonds, investment funds, ETFs and crypto-assets;
- a second home, investment property and rented property;
- receivables and other private assets;
- certain debts, after deduction of the applicable debt threshold.
A taxpayer’s main home is generally included in Box 1 rather than Box 3.
For the provisional 2026 calculation, the Belastingdienst uses deemed returns by asset category: 1.28% for bank deposits, 6.00% for investments and other assets, and 2.70% for qualifying debts. These percentages are used for provisional calculations and may be finalised later. The debt threshold in 2026 is €3,800 per person.
The 36% tax is not charged on the full value of the assets, but on the calculated Box 3 income after application of the tax-free allowance and the allocation rules for tax partners.
Separate rules apply when calculating the actual return. Interest and dividends received are taken into account and, for certain assets, changes in value are also included. A taxpayer using this method must calculate the actual return on all Box 3 assets, rather than selecting only particular assets.
Relief for entrepreneurs and investment deductions
Entrepreneurs subject to personal income tax may qualify for special deductions if the statutory conditions are met.
- Self-employed person’s deduction (zelfstandigenaftrek). In 2026, this deduction is €1,200 if the entrepreneur satisfies, among other things, the hours criterion. Qualifying start-up entrepreneurs may be entitled to an additional deduction of €2,123.
- SME profit exemption (mkb-winstvrijstelling). In 2026, this equals 12.7% of profit after entrepreneurial deductions.
- Small-scale investment deduction (KIA). In 2026, this may be available for investments in qualifying business assets between €2,901 and €398,236. For investments between €2,901 and €71,683, the deduction equals 28% of the investment amount; separate fixed and declining amounts apply to higher investments.
- Energy investment allowance (EIA). In 2026, this equals 40% for new assets included in the official Energy List, subject to the conditions and timely notification to the Netherlands Enterprise Agency (RVO).
- Environmental investment allowance (MIA). Depending on the asset category, rates of 27%, 36% or 45% apply in 2026.
If a business asset for which an investment deduction was claimed is disposed of within the applicable five-year period, part of the earlier deduction may have to be added back to profit as a desinvesteringsbijtelling.
Entitlement to entrepreneurial and investment deductions depends on the status of the activities, the nature of the asset, the amount invested, notification deadlines and other conditions. Purchasing solar panels, an electric vehicle or energy-efficient equipment does not in itself guarantee a tax benefit.
Filing an income tax return in the Netherlands
Who must file a return
If the Belastingdienst sends a letter requiring a return to be filed (aangiftebrief), filing is mandatory and the return must be submitted by the date stated in the letter.
The absence of such a letter does not always remove the filing obligation. For the 2025 return, an individual had to file voluntarily if the completed calculation showed €58 or more payable. In that case, the Belastingdienst stated a deadline of 14 July 2026. If the calculation showed a refund of €19 or more, filing was also generally advisable.
A separate filing obligation may arise for persons claiming income-related benefits if the assets of the taxpayer, their partner or their minor children exceed the applicable threshold.
Deadline for filing the 2025 return
The date stated in the Belastingdienst letter is decisive. For most individuals, the 2025 return had to be received by 1 May 2026.
If an extension request was submitted before 1 May 2026 and approved, the standard extension ran until 1 September 2026. Tax partners must request an extension separately. An extension does not always prevent tax interest from accruing.
As at 21 July 2026, the ordinary deadline of 1 May and the 14 July deadline for voluntary filing without a letter have already passed. If the return has not yet been filed, it should be submitted as soon as possible and any letters, reminders and formal demands from the Belastingdienst should be checked carefully.
How to file the return
A return is usually filed through Mijn Belastingdienst using DigiD. Depending on the circumstances, the mobile application, a paper form, filing through a tax adviser or a special procedure for foreign taxpayers may also be available.
No separate “individual tax key” is required for an ordinary online return. An individual normally signs in with DigiD, while a representative may act under the appropriate authorisation.
Penalty for late filing
Where a deadline is missed, the Belastingdienst generally first sends a reminder and then a formal demand (aanmaning). After receiving the formal demand, the return must be filed within the period stated, usually within 10 working days from the date of the demand.
If the return is received after that period, the standard late-filing penalty is €469. For repeated violations, the penalty may be increased to €6,709. If no return is filed, the Belastingdienst may make an estimated assessment and calculate the tax on the basis of an estimated income.
Intentional failure to file, or intentionally providing incorrect or incomplete information, may result in other and more serious penalties. Tax interest may also be charged in addition to the penalty.
Documents to prepare
- annual statements from employers, pension providers and insurers;
- information on bank accounts, investments and crypto-assets;
- the WOZ value of property and mortgage information;
- information on foreign income, accounts and assets;
- business records and details of business investments;
- documents relating to medical expenses, donations, maintenance payments and other possible deductions;
- details of the tax partner and children where these affect the calculation.
Pre-filled information must be checked. Responsibility for the completeness and accuracy of the return remains with the taxpayer, even where the Belastingdienst has entered part of the information automatically.
Frequently asked questions about income tax in the Netherlands
What is an income tax return in the Netherlands?
It is a report of income, deductions, assets and personal circumstances for a specific tax year. On that basis, the Belastingdienst determines the final amount of tax, any refund and the applicable tax credits.
Must every individual file a return?
No. Filing is mandatory when the Belastingdienst sends the relevant letter and in certain cases without a letter, for example where the calculation results in tax payable above the applicable threshold.
Must a return be filed if a person only receives salary?
Not always. The employer withholds wage tax from salary, but filing may still be mandatory because of a Belastingdienst letter, a second employer, foreign income, assets, an owner-occupied home or other circumstances. Filing may also result in a refund.
What was the deadline for filing the 2025 return?
The date stated in the Belastingdienst letter applies. For most individuals, this was 1 May 2026. Where an extension was requested and approved in time, the deadline was generally extended to 1 September 2026.
What are the Box 1 rates in 2026?
For a person who does not reach the AOW age in 2026: 35.75% up to €38,883, 37.56% on the portion from €38,883 to €78,426, and 49.50% on the portion above €78,426.
How is a substantial interest in a company taxed?
Box 2 income in 2026 is taxed at 24.50% up to €68,843 and 31% above that amount. A substantial interest generally arises where a person owns at least 5% of a company.
How is Box 3 calculated in 2026?
The rate is 36%, and the tax-free allowance is €59,357 per person. Under the transitional rules, deemed rates of return are applied first by asset category. If the actual return is lower, the taxpayer may report it so that the more favourable result can be used.
Are gifts and maintenance payments taxable?
A gift is generally not Box 1 income, but it may be subject to separate gift tax if the applicable exemption is exceeded. Partner maintenance received is generally subject to income tax, while child maintenance received is not taxable.
What penalty applies to a late return?
If the return is filed after the period stated in the formal demand from the Belastingdienst, the standard penalty is €469. For repeated violations, the penalty may be as high as €6,709.
Can returns for earlier years still be filed?
If the Belastingdienst did not require a return, a voluntary return can generally be filed for the previous five years. In 2026, a 2021 return can still be filed no later than 31 December 2026.
This material is provided for general information only. Tax consequences depend on the actual circumstances, tax residence, any applicable international tax treaty and the content of correspondence from the Belastingdienst.
