In the Netherlands, income is taxed on basis of a 3 Box system, in which different types of income are taxed at certain tax rates. More information about the system, the applicable tax rates, personal deductions, tax credits etcetera can be found here.

Box 1: Income from work and principal residence

Box 2: Income from substantial interest 

Box 3: income from savings and investments


To which extend you are taxed on income in the Netherlands, depends on your residence situation. There are different types of tax returns based on residency. Also in case of sole-proprietorship and decease, special tax returns should be filed. 

Note that other forms of income: received gifts, inheritance, gambling proceeds etc. are not relevant for the income tax but are taxed separately and require separate reporting.

Personal deductions (only for resident taxpayers)
The Dutch income tax system offers the possibility to deduct certain expenses. Apart from the specified personal deductions, it is not possible to tax deduct other personal expenses. In general, the personal deductions are used as tools to reduce costs for tapayers in unfortunate situations or to fiscally stimulate taxpayers to donate to charity for example. 

Note that conditions apply and often also income depending thresholds are applicable. More information on personal deductions can be found here.

Tax credits (Heffingskortingen)
The Dutch income tax system also offers some tax credits. If these credits apply, depends on your situation and the extend of the credit is often based on your income. More information on the tax credits, the conditions and the limintations can be found here.

General information tax return filing
More details and information on the general process of income tax return filing in the Netherlands (filing requirements, deadlines, penalties) can be found here.