Glossary
All Dutch tax terms clearly explained
57 terms
30% Ruling
Tax benefit for foreign employees with specific expertise.
Additional Tax Assessment (Navorderingsaanslag)
An additional tax assessment when the Tax Authority discovers you paid too little tax.
Alimony (Alimentatie)
Financial support to your ex-partner or children after divorce, tax-deductible if it concerns partner alimony.
Annual Pension Allowance (Jaarruimte)
The amount you may save or invest tax-free annually for your pension.
Annual Statement (Jaaropgave)
A summary from your employer or benefits agency showing your annual salary and withheld tax.
Benefits Partner (Toeslagpartner)
The person considered your partner for benefits purposes – this determines your entitlement to benefits.
Box 1 – Income from Work and Home
The tax box covering your salary, business profit, and home ownership.
Box 2 – Income from Substantial Interest
The box for directors and shareholders holding 5% or more shares in a company.
Box 3 – Income from Savings and Investments
The wealth tax on your savings, investments, and real estate (excluding primary home).
Charitable Donation Deduction
Donations to charities can be deducted from your taxes under certain conditions.
Childcare Allowance (Kinderopvangtoeslag)
Government allowance to help cover the costs of childcare.
Company Car Addition (Bijtelling)
A percentage of the catalogue value of your company car is added to your income.
Deemed Rental Value (Eigenwoningforfait)
A percentage of your home's assessed value added to your income as a homeowner.
DigiD (Digital Identity)
Your digital identity used to log in to the Tax Authority and other government agencies.
Elderly Tax Credit (Ouderenkorting)
An additional tax credit for people who have reached the state pension age.
Employment Tax Credit (Arbeidskorting)
Tax credit for everyone who works: the more you earn, the higher the credit (up to a maximum).
Final Tax Assessment (Definitieve Aanslag)
The Tax Authority's final calculation of how much tax you owe or get back.
Fiscal Partnership
Filing jointly and splitting deductions with your partner for the lowest tax bill.
Fiscal Partnership (Fiscaal Partnerschap)
Tax status for cohabiting partners who file jointly and can allocate income between them.
Gift Tax (Schenkbelasting)
Tax on gifts above the exemption threshold, depending on the relationship between giver and receiver.
Healthcare Allowance (Zorgtoeslag)
Monthly allowance to help keep health insurance premiums affordable for lower incomes.
Healthcare Cost Deduction
Specific unreimbursed healthcare costs that you can deduct from your taxes.
Hours Criterion
You must spend at least 1,225 hours per year on your business for certain deductions.
Housing Allowance (Huurtoeslag)
Allowance for tenants with a low income to help keep monthly rent affordable.
Income Averaging (Middeling)
Averaging your income over three consecutive years to get a tax refund when income fluctuates.
Income Tax
The tax you pay on all your income, divided across three boxes.
Inheritance Tax (Erfbelasting)
Tax on what you inherit after someone's death, depending on the value and your relationship to the deceased.
Investment Deduction
Extra deduction on top of depreciation when you invest in business assets as an entrepreneur.
M-Form (Migration Tax Return)
Special tax form for the year you move to or from the Netherlands.
Mortgage Interest Deduction
Deducting mortgage interest from your taxable income in box 1.
Payroll Tax (Loonheffing)
The tax and social contributions your employer withholds from your salary.
Pension Equalization (Pensioenverevening)
Legal division of pension rights built up during marriage upon divorce.
Personal Deductions
Personal deductions such as alimony, charitable donations, and healthcare costs that lower your income.
Preliminary Refund
Receive part of your tax refund monthly in advance, even before filing your return.
Provisional Tax Assessment
An advance payment from the tax authorities based on an estimate of your income.
Revision Interest (Revisierente)
A 20% penalty interest when you withdraw your pension pot early or violate fiscal rules.
Self-Employed Deduction
A €2,470 deduction for entrepreneurs who meet the hours criterion.
Small Business Scheme (KOR)
Exemption from VAT filing and payment for entrepreneurs with low turnover.
Small-Scale Investment Deduction (KIA)
Extra deduction when you invest between €2,901 and €392,269 in business assets.
SME Profit Exemption
12.70% of your profit is exempt from tax – for all income tax entrepreneurs.
Starter's Deduction
An extra €2,123 deduction for entrepreneurs in the first three years of their business.
Student Finance (Studiefinanciering)
Financial support from DUO for students, consisting of a loan, supplementary grant, and tuition fee credit.
Substantial Interest (Aanmerkelijk Belang)
You have a substantial interest if you own 5% or more of the shares in a company.
Tax Authorization (Machtiging)
Granting permission to a tax advisor or another person to handle your tax affairs on your behalf.
Tax Credit (Heffingskorting)
Credits that are directly subtracted from your tax bill.
Tax Deduction (Aftrekpost)
An expense you can deduct from your taxable income, resulting in less tax to pay.
Tax Interest (Belastingrente)
Interest charged by the Tax Authority when you pay tax late or pay too little.
Tax Objection (Bezwaarschrift)
A formal objection against a tax assessment when you disagree with the Tax Authority.
Tax Refund (Belastingteruggave)
Money you receive back from the Tax Authority when you have paid too much tax.
Tax Residence (Fiscale Woonplaats)
The country where you are considered a resident for tax purposes – determining where you pay tax.
Tax Return (Belastingaangifte)
The annual form you use to report your income and deductions to the Tax Authority.
Transfer Tax (Overdrachtsbelasting)
Tax you pay when purchasing a home or other real estate.
VAT (Value Added Tax)
Tax on the sale of goods and services that entrepreneurs must remit.
VAT Entrepreneur
Anyone who independently practices a profession or runs a business is a VAT entrepreneur and must charge VAT.
Wealth Tax (Deemed Return Tax)
Tax on a deemed return on your assets in box 3.
Withholding Tax (Voorheffing)
Tax withheld in advance that is later offset against your final tax assessment.
WOZ Value (Property Valuation)
The property value determined by your municipality, used for various taxes.