Registration at the Dutch Tax Administration
Just like other entrepreneurs, freelancers/self-employed professionals must register with the Dutch Tax and Customs Administration (Belastingdienst). They will determine whether you are an entrepreneur for the purposes of turnover tax and income tax. In most cases, the registration is done automatically when you register with KVK, or, if your legal structure is a bv, by your notary.
Entrepreneur for the purposes of turnover tax
VAT (value added tax) is a form of turnover tax. Freelancers/self-employed professionals are almost always considered entrepreneurs for the purposes of turnover tax, which means that they must charge and pay VAT (btw) on their income. If your turnover is less than €20,000 per year, you may be eligible for the small businesses tax scheme (kleineondernemersregeling). In addition, some services (in journalism and education, for example) are exempt from VAT.
VAT identification and VAT number
When you register with the Dutch Tax Administration, you will be given 1 or 2 VAT numbers.
Sole proprietors have 2 VAT numbers:
- a VAT identification number (btw-id), which you use for your contacts with clients (for example, on quotations and invoices), and
- a VAT tax number, for communications with the Tax Administration.
BV's have 1 VAT number for all their communications, with customers and the Tax Administration.
Entrepreneur for the purposes of income tax
Being considered an entrepreneur for the purposes of turnover tax does not mean that you will automatically be considered an entrepreneur for the purposes of income tax. The latter requires that you satisfy a number of conditions. If you do not fulfil these criteria and you are not employed by your customer, the Dutch Tax and Customs Administration regards your income as regular incidental earnings. In that case you are not entitled to claim certain tax deductions that are available to entrepreneurs. However, you may claim expenses related to your work.
Freelancers/self-employed professionals and their client can decide, but are not obliged, to use a model agreement to establish an independent business relationship. However, the Dutch Tax and Customs Administration may check retrospectively if the type of relationship meant actual employment or not, even if this was not intended. If so, this may have consequences regarding additional payroll taxes for both freelancer/self-employed professional and client. You can obtain model agreements in English through ZZP Nederland. This is only possible after paying a membership fee.
Tax facilities, subsidies and benefits
As a freelancer/self-employed professional based in the Netherlands you can qualify for a number of benefits and tax facilities and subsidies.