Glossary
All Dutch tax terms clearly explained
20 terms
30% Ruling
Tax benefit for foreign employees with specific expertise.
Annual Pension Allowance (Jaarruimte)
The amount you may save or invest tax-free annually for your pension.
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.
Deemed Rental Value (Eigenwoningforfait)
A percentage of your home's assessed value added to your income as a homeowner.
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.
Income Tax
The tax you pay on all your income, divided across three boxes.
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.
Provisional Tax Assessment
An advance payment from the tax authorities based on an estimate of your income.
Self-Employed Deduction
A €2,470 deduction for entrepreneurs who meet the hours criterion.
Small-Scale Investment Deduction (KIA)
Extra deduction when you invest between €2,801 and €387,580 in business assets.
SME Profit Exemption
13.31% 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.
Tax Credit (Heffingskorting)
Credits that are directly subtracted from your tax bill.
Wealth Tax (Deemed Return Tax)
Tax on a deemed return on your assets in box 3.
WOZ Value (Property Valuation)
The property value determined by your municipality, used for various taxes.