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From Income to Road Tax: A Beginner's Guide to Dutch Taxes for Indian Expats

Updated: Jun 22, 2023

If you're an Indian expat living in the Netherlands, understanding the Dutch tax system is essential to managing your finances. The Netherlands has a complex tax system, but with a little bit of guidance, you can navigate through it with ease. In this blog, we will provide you with a simple yet comprehensive guide to the Netherlands taxes.

Income Tax

  • All residents in the Netherlands are subject to Dutch income tax on their worldwide income, including employment income, rental income, and investment income.

  • The Dutch tax year runs from 1 January to 31 December. You are required to file an annual tax return by 1 May of the following year. If you hire a tax advisor, you can request an extension until 1 May of the second year following the year of assessment.

  • The Dutch tax system operates on a progressive tax rate basis. This means that the more you earn, the higher the percentage of your income that you pay in tax. The current Dutch income tax rates are as follows:

    • Income up to €73.031: 36.93%

    • Income from €73.031: 49.50%

  • In addition to income tax, you may also be subject to social security contributions, which are deducted from your gross income. The amount you pay depends on your income level and whether you are employed or self-employed.

Example: If you earn €60000 a year, your income tax rate would be 36.93% , resulting in a total tax liability of €22158. You would also be subject to social security contributions.

This link is helpful for checking your own tax

For more information on income tax in the Netherlands, visit the website of the Dutch Tax and Customs Administration (Belastingdienst):

You may be eligible for the 30% ruling, Read more about 30% ruling here

House Tax

  • In the Netherlands, property tax is called 'Onroerendezaakbelasting' (OZB), which is a tax on real estate. The tax is levied by municipalities and is based on the value of your property.

  • The value of your property is determined by the municipality's appraisal, which is conducted every few years. The appraisal takes into account factors such as the size of your property, its location, and the current real estate market.

  • The OZB tax is calculated as a percentage of the property value, and the rate varies by municipality. The tax is typically paid in two installments each year.

  • In addition to the OZB tax, homeowners in the Netherlands are also required to pay a sewerage charge and a waste disposal charge. These charges are also levied by municipalities and are based on the size of your property.

For more information on house tax in the Netherlands, visit the website of the Dutch Tax and Customs Administration :

Road Tax

  • In the Netherlands, road tax is called 'Motorrijtuigenbelasting' (MRB), which is a tax on vehicles. The tax is levied by the Dutch government and is based on the type, weight, and age of your vehicle, as well as its CO2 emissions.

  • The MRB tax is calculated annually, and the amount you pay depends on the province in which you reside, as well as the characteristics of your vehicle. The tax is typically paid in monthly, quarterly, or annual installments.

  • Electric vehicles and vehicles with low CO2 emissions are subject to lower road tax rates. In addition, if your vehicle is over 40 years old, you may be exempt from paying road tax.

  • The Dutch government also imposes a tax on fuel, which is included in the price of gasoline and diesel. This tax is called 'Accijns', and the amount you pay depends on the type of fuel and the quantity purchased.

Example: If you own a gasoline-powered car weighing 1200 kg and emitting 130 g/km of CO2, and you reside in the province of South Holland, you would pay €522 in MRB tax each year. In addition, you would pay an accijns tax of €0.811 per liter of gasoline purchased.

For more information on road tax in the Netherlands, visit the website of the Dutch Tax and Customs Administration (Belastingdienst):

In Conclusion navigating the Dutch tax system can be daunting, but with the right guidance, you can manage your finances with ease. We hope that this guide has provided you with valuable insights into the Netherlands taxes. Remember, it's always a good idea to seek professional advice to ensure that you are compliant with Dutch tax laws.

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