Does the Dutch Tax and Customs Administration consider you to be an entrepreneur for income tax purposes? Then you must pay income tax on your business's profit.
Various criteria determine if you are an entrepreneur for income tax purposes. For instance, if your activities are conducted in an economic setting, if you can expect to make a profit, if you work independently and at your own risk, then you are probably considered to be an entrepreneur in terms of income tax. You can also check this with the Tax administration’s tool (in Dutch).
Entrepreneur for income tax purposes
When you register your business with the Chamber of Commerce (KVK), the Dutch Tax and Customs Administration (Belastingdienst) will assess if you are an entrepreneur for income tax purposes. Income tax is divided into 3 groups (which are called 'boxes'), each with its own rate:
- Box 1: taxable income on wages and property (in Dutch)
- Box 2: taxable income from a substantial business interest (in Dutch)
- Box 3: taxable income from savings and investments (in Dutch)
Your business's profit is part of your 'income from wages and property' (box 1). You use the box 1 rate (in Dutch) to calculate the tax amount. This amount decreases if you are eligible for tax credits (heffingskortingen, in Dutch).
Healthcare insurance premium
Entrepreneurs and self-employed professionals also have to pay an income-dependent contribution pursuant to the Health Care Insurance Act (Zvw) on the profits from their business. The percentage of this Zvw-contribution changes every year. It is mandatory for everyone who earns an income. This contribution is on top of the premium that you pay for the healthcare insurance of your choice.
File your income tax return
As an independent business person, you must file your return digitally before 1 May of each year digitally. Read how to file your income tax return in the Netherlands.
Are you an employer? You must make sure your employees receive their annual income statement (in Dutch) in time, well before 1 April, so they can file their private tax return before 1 May as well.