VAT and income tax for self-employed professionals
In the Netherlands, nearly all self-employed professionals must pay VAT and income tax. Depending on the legal structure you choose, you pay income tax or corporate income tax. If your turnover stays below a certain threshold, you may apply for the small businesses scheme (KOR). You then do not have to file VAT returns. Read more about taxes for self-employed professionals.
Registration with the Netherlands Tax Administration
When you start your business, you must register with the Netherlands Chamber of Commerce KVK and with the Netherlands Tax Administration (Belastingdienst). Most people starting a business as a self-employed professional choose the legal structure sole proprietorship (eenmanszaak, also known in Dutch as a zzp’er) or a BV (private limited company). Read more about choosing a legal business structure.
If you register as an eenmanszaak, KVK will take care of your registration with the Belastingdienst. If your legal structure is a BV, your notary will register you with KVK and the Tax Administration. The Tax Adminstration will decide whether you are an entrepreneur. If you are, you must file tax returns for VAT (turnover tax) and income tax.
Entrepreneur for the purposes of VAT
VAT (value added tax) is a form of turnover tax. The Tax Administration almost always decides that self-employed professionals are entrepreneurs for the purposes of VAT. This means you must charge your clients or customers VAT (btw). And that you must file a VAT return, and pay the received VAT to the Tax Administration. You may deduct the VAT you have paid yourself to suppliers.
How much VAT do I charge or pay?
There are 3 VAT rates in the Netherlands:
- 0%
- 9%
- 21%
Read the article VAT rates and exemptions to find out which VAT rate applies to your situation.
Small Businesses Scheme (KOR)
If your turnover is a maximum of €20,000 per year, you may apply for the small businesses tax scheme (kleineondernemersregeling, KOR). You then do not have to file VAT returns. However, you cannot reclaim VAT you have paid, to your suppliers for example.
VAT identification and VAT number
When you register with the Tax Administration, you receive 1 or 2 VAT numbers.
Eenmanszaken (sole proprietors) have 2 VAT numbers:
- a VAT identification number (VAT-ID). You use this for your contacts with clients (for example, on quotations and invoices);
- a VAT tax number, for communications with the Tax Administration.
BVs have 1 VAT number for all their communications with both customers and the Tax Administration.
Entrepreneur for the purposes of income tax
The Belastingdienst will also decide whether you are an entrepreneur for the purposes of income tax. There are several criteria for this. If the Tax Administration decides you are an entrepreneur for income tax, you have to file an income tax return or a corporate income tax return.
Not an entrepreneur, but do have income from other activities
Do you only take on the occasional job? For example, alongside your main job, or as a childminder or courier? In that case, you are often not considered as self-employed for income tax purposes. You are then said to be receiving income from other activities (in Dutch). You will usually need to file an income tax return, under the heading 'inkomsten uit overig werk'.
Which income tax return do I have to file?
That depends on your legal structure:
Examples of VAT and income tax calculations
Want to see how you calculate VAT and income tax? The KVK article Tax essentials for starters offers examples of a VAT and income tax calculation for starting businesses. You can also use the Income Tax calculation tool (in Dutch).
Tax facilities, subsidies and benefits
As a freelancer/self-employed professional based in the Netherlands, you can apply for a number of benefits and tax schemes and subsidies.